Question

Question 15 Oriole Corporation was organized on January 1, 2019. During its first year, the corporation issued 2,100 shares of $50 par value preferred stock and 100,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2019, $6,350; 2020, $14,500; and 2021, $29,000. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and noncumulative. 2019 2020 2021 Allocation to preferred stock Allocation to common stock 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 stock Allocation to common stock 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. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Debit Credit Date Account Titles and Explanation Dec. 31

Answer 1

preferred stock dividend is 7% and non-cumulative
	2019	2020	2021
allocation to preferred stock	6,350	7,350	7,350
allocation to common stock	-	7,150	21,650

Preferred stock dividend = 2,100 x 50 = 105,000 x 7% = 7,350

preferred stock dividend is 9% and cumulative
	2019	2020	2021
allocation to preferred stock	6,350	12,550*	9,450
allocation to common stock	-	1,950	19,550

Preferred stock dividend = 2,100 x 50 = 105,000 x 9% = 9,450

*arrears of 2017 plus current year dividend

Date	Account	Debit	Credit
Dec-31	Retained earnings	29,000
	Dividend payable		29,000