Aim Corp. currently has outstanding 20,000 no par value common shares with a carrying value of $200,000, and 10,000, $0.60, cumulative, fully participating preferred shares with a carrying value of $100,000. Dividends on the preferred shares are one year in arrears. Assuming that Aim wishes to distribute $54,000 in dividends, show the distribution of the dividends between the common and preferred shareholders.

Part 2

Prepare journal entries for each of the following transactions.

June 20

Accepted subscriptions for 5,000 common shares. Received a 30% down payment with the remainder due in two months. The subscription price was $5 per share.

August 20

Received remaining payment on all but 500 of the subscribed and issued 4,500 common shares. The subscriber to the 500 has defaulted as he is not able to pay and the partial payment was forfeited and kept by Aim Corp.

September 1

Sold 1,500 shares of preferred for cash..

September 23

Purchased and retired 2,000 common shares at $4 per share.

November 15 Declared a 2 for 1 stock split.

Declared a 5% common stock dividend. Market value is $6

Issued Stock dividend.