Question

New England Communications has the following stockholders' equity on December 31, 2018 Click on the icon to view the stockholders' equity) Read the requirements Requirement 1. Assuming the preferred stock is cumulative, compute the amount of dividends to preferred stockholders and to common stockholders for 2018 and 2019 total dividends are $23.400 in 2018 and $46,000 in 2019. Assume no changes in preferred stock and common stock in 2019. (Assume all preferred dividends have been paid prior to 2018. Complete all input boxes. Enter a "O" for zero amounts. For the current year preferred dividend, be sure to enter the calculated dividend on the current year dividend line and the paid out dividend on the total dividend to preferred stockholders" line) New England's 2018 dividend would be divided between preferred and common stockholders in this manner Total Dividend 2018 Dividend to preferred stockholders Dividend in arrears Current your dividend Total dividend to preferred stockholders Dividend to common stockholders Enter any number in the edit fields and then click Check Answer. 4 parts Clear A

Answer 1

New England Communication
	Preferred Dividend=($264000*10%)=	$ 26,400.00
1)	Total Dividend -2018		$   23,400.00
	Dividend to Preferred stockholder's
	Arrears Dividend	$                 -
	Current Year Dividend(24000*$11*10%)	$ 26,400.00
	Total Dividend paid to Preferred stockholder's		$ -23,400.00
	Dividend paid to common stockholder's		$                  -
	Total Dividend -2019		$   46,000.00
	Dividend to Preferred stockholder's
	Arrears Dividend($26400-$23400)	$    3,000.00
	Current Year Dividend(24000*$11*10%)	$ 26,400.00
	Total Dividend paid to Preferred stockholder's		$ -29,400.00
	Dividend paid to common stockholder's		$   16,600.00
	Cumulative preferred stock has dividend preference.No dividend paid to common stockholder's until all arrears of dividend paid to preferred stock.
2)
Date	General, Journal	Debit	Credit
01-Dec-18	Retained Earnings	$ 26,400.00
	To Dividend Payable -Preferred stock		$   26,400.00
	(Being amount of declaration of cash dividend)
20-Dec-18	Dividend Payable-Preferred stock	$ 26,400.00
	To Cash		$   26,400.00
	(Being amount of dividend paid )