Question

Sunland Company was organized on January 1, 2021. During its first year, the corporation issued 2,400 shares of $50 par value preferred stock and 150,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2021. 55,200; 2022, $11.900; and 2023, $28,800. Your answer is partially correct. Try again. Show the allocation of dividends to each class of stuck, assuming the preferred stock dividend is 5% and noncumulative. (Do not leave any answer field blank. Enter o for amounts.) 2023 Total dividend 29200 Allocation to preferred stock B400 Remainder to common stock 20400 Your answer is partially correct. Try again. Show the allocation of dividends to cach class of stock, assuming the preferred stock dividend is 5% and cumulative. (Do not leave any answer field blank. Enter for amounts.) 2021 2023 Total dividend 1 28800 Allocation to preferred stock 9600 Remainder to common stock 2100 19200 Your answer is correct. Journalize the declaration of the cash dividend at December 31, 2023, under part (1). (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 ties and enter for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31 Cash Dividends 28800|| Dividends Payable 2880D

Answer 1

Annual preferred dividend = Number of preferred shares x Par value per preferred share x Dividend rate

= 2,400 x 50 x 5%

= $6,000

	2021	2022	2023
Total dividend	5,200	11,900	28,800
Allocation of preferred stock	5,200	6,000	6,000
Remainder to common stock	0	5,900	22,800

Annual preferred dividend = Number of preferred shares x Par value per preferred share x Dividend rate

= 2,400 x 50 x 6%

= $7,200

	2021	2022	2023
Total dividend	5,200	11,900	28,800
Allocation of preferred stock	5,200	9,200	7,200
Remainder to common stock	0	2,700	21,600

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