The outstanding capital stock of Robbins Corporation consisted of 3,000 shares of 10 percent preferred stock, $250 par value, and 30,000 shares of no-par common stock with a stated value of $250. The preferred was issued at $412, the common at $480 per share.
On 2005 January 1, the retained earnings of the company were USD 250,000. During the succeeding five years, net income was as follows:
2005 $767,500
2006 510,000
2007 48,000
2008 160,000
2009 662,500
No dividends were in arrears as of 2005 January 1, and during the five years 2005-2009, the board of directors declared dividends in each year equal to net income of the year.
Provide the journal entries for each year showing the dividends declared on each class of stock assuming the preferred stock is noncumulative: