Knudsen Corporation was organized on January 1, 2019. During its first year, the corporation issued 2,000 shares

Question:

Knudsen Corporation was organized on January 1, 2019. During its first year, the corporation issued 2,000 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, $5,000; 2020, $12,000; and 2021, $28,000.

Instructions
a. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 6% and noncumulative.
b. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and cumulative.
c. Journalize the declaration of the cash dividend at December 31, 2021, under part (b).

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...

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