1. Practice Problem

#6 ALLOCATION OF DIVIDENDS BETWEEN PREFERRED AND COMMON STOCKHOLDERS 5 points On October 1, 2020 Devons Compnay declared a $2 per share cash dividend on common stock. Number of shares of $1 par common stock issued and outstanding 25,000 Number of shares of $100 par 3% cumulative preferred stock outstanding 3,000 The company did not pay dividends in 2018 or 2019 What amount of dividends must the company pay the preferred shareholders in 2020 if they wish to pay the common stockholders a dividend? Annual preferred dividend _________________________________________________________

2. Practice Problem

#7 STOCKHOLDERS' EQUITY SECTION OF THE BALANCE SHEET 10 points Carson Corporation has the following capital stock outstanding at December 31, 2020: 9% Preferred stock, $100 par value, cumulative 12,000 shares issued and outstanding $1,200,000 Common stock, no par, $10 stated value, 400,000 shares authorized, 300,000 shares issued and outstanding $3,000,000 The preferred stock was issued at $110 per share. The common stock was issued at $16 per share. Instructions Prepare the paid-in capital section of the balance sheet at December 31, 2020.