Canaan Limited had 20,000 $2 cumulative preferred shares issued. It was unable to pay any dividend to

Question:

Canaan Limited had 20,000 $2 cumulative preferred shares issued. It was unable to pay any to the preferred shareholders in the current year.
(a) What are the dividends in arrears?
(b) How would the dividends in arrears be reported in the financial statements?
(c) Would your answer to part (a) change if the preferred shares were noncumulative rather than cumulative?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...