Question

Crane Company was organized on January 1, 2021. During its first year, the corporation issued 1,500 shares of $50 per value preferred stock and 100.000 shares of $10 par value common stock At December 31, the company declared the following cash dividends: 2021, $4.000:2022. $11,000; and 2023. $27,000. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 6% and noncumulative. (Do not leave any answer field blank. Enter O for amounts.) 2021 2022 2023 Total dividend Allocation to preferred stock Remainder to common stock e Textbook and Media List of Accounts Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and cumulative. (Do not leave any answer field blank. Enter o for amounts.) 2021 2022 2023 Total dividend Allocation to preferred stock Remainder to common stock $ e Textbook and Media e Textbook List of Accounts Journalize the declaration of the cash dividend at December 31, 2023, under part (b). (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit Dec 31

Answer 1

Allocation of dividend:

2 1 Non cumulative: 2021 2022 2023 3 Total dividend 4000 11000 27000 4 Allocation to preferred stock =B3 =(1500*50)*6% =(1500*50*6% 5 Remainder to common stock - =C3-C4 =D3-D4 6 Cumulative: 2021 2022 2023 8 Total dividend 4000 11000 27000 9 Allocation to preferred stock =B8 =(1500*50)*7% =(1500*50)*7% 10 Dividend in arrears =C9-B9 11 Remainder to common stock - =C8-C9-C10 =D8-D9

Resulting excel sheet is as follows:

A B C D 1 Non cumulative: 2021 4000 2022 11000 2023 27000 4000 4500 3 Total dividend Allocation to 4 preferred stock Remainder to 5 common stock 6 Cumulative: 6500 22500 2021 4000 2022 11000 2023 27000 4000 5250 8 Total dividend Allocation to 9 preferred stock 10 Dividend in arrears Remainder to 11 common stock 5250 1250 4500 21750

The required journal entry is as follows:

Date Accounts and Explanation Post Debit Credit Ref. (S) (S) 27,000 27,000 Dec. 31 Retained earnings Dividend payable (To record the declaration of cash dividend)