Vogue Skincare has 5,000 shares of (5 %, $ 20) par value preferred stock and 100,000 shares
Question:
Vogue Skincare has 5,000 shares of \(5 \%, \$ 20\) par value preferred stock and 100,000 shares of \(\$ 1.50\) par common stock outstanding. During a three-year period, Vogue declared and paid cash dividends as follows: \(2006, \$ 4,000 ; 2007, \$ 10,000\); and 2008, \(\$ 20,000\).
Requirements
1. Compute the total dividends to preferred and to common for each of the three years if
a. Preferred is noncumulative.
b. Preferred is cumulative.
2. For case 1.b., journalize the declaration of the 2008 dividends on December 22, 2008, and payment on January 14, 2009. Use separate Dividends Payable accounts for Preferred and Common.
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