Question

Carla Vista Corporation was organized on January 1, 2019. During its first year, the corporation issued 2,050 shares of $50 par value preferred stock and 102,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2019, $6,475; 2020, $14,200; and 2021, $28,500. Show the allocation of dividends to each class of stack, assuming the preferred stock dividend is 7% and noncumulative. 2019 2020 2021 Allocation to preferred stock Allocation to common stock $ SHOW LIST OF ACCOUNTS LINK TO TEXT Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 9% and cumulative, 2019 2020 2021 Allocation to preferred stocks Allocation to common stock SHOW LIST OF ACCOUNTS LINK TO TEXT Journalize the declaration of the cash dividend at December 31, 2021, under part (b). (Credit account titles are automatically indented when amount is entered. Do not indent manually. no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31

Answer 1

1. Preferred stock dividend is 7 % and noncumulative:

Preferred stock dividend = 2,050 x $ 50 x 7 % = $ 7,175

	2019	2020	2021
Allocation to preferred stock	$ 6,475	$ 7,175	$ 7,175
Allocation to common stock	-	$ 7,025	$ 21,325

2. Preferred stock dividend is 9 % and cumulative:

Preferred stock dividend = 2,050 x $ 50 x 9 % = $ 9,225

	2019	2020	2021
Allocation to Preferred Stock	$ 6,475	$ 11,975	$ 9,225
Allocation to Common Stock	-	2,225	19,275