20.

Trainor Corporation was organized on January 1, 2014. During its first year, the corporation issued 20,000 preferred shares with a $0.30 dividend entitlement and 200,000 common shares, both at $1 per share. At December 31, the corporations year end, Trainor declared the following cash dividends:

Preferred shares Common Shares

2014 $0.25 per share $0.00

2015 as required by terms $0.05 per share

2016 as required by terms $0.15 per share

Instructions

a. Calculate the total dividends and the amount paid to each class of shares, assuming the preferred dividend is not cumulative.

b. Calculate the total dividends and the amount paid to each class of shares, assuming the preferred dividend is cumulative.

c. Journalize the declaration of the cash dividend at December 31, 2015 using the assumption of part b.