Calculating the CS and PS Dividends for a Company 

Shareholders’ Equity Share Capital $5 PS, Cumulative

5,000 shares authorized, 2,500 shares issued $2,500,000

Common Shares, 100,000 shares authorized, 5,000 issued $100,000

Total Share Capital 2,600,000

Retained Earnings 300,000

Total Shareholders’ Equity $2,900,000

On October 10, 2014, Amazon declared an $85,000 Dividend to be paid Nov. 10 to shareholders of record, October 31. Show your work when answering the following questions

a) What would be the total PS Dividend paid?

b) What would be the CS Dividend paid?

c) What would be the dividend per common share paid?

d) What dividend would have been paid to PS if no dividends in arrears existed?

Prior Period Error If inventory was overstated by 20,000 in the previous year. Income tax rate is 25%. What would the adjusting entry be this year?

At what amount is the CS account debited when shares are reacquired by the corporation?