Allocate cash dividends to preferred and common stock.

(LO 1) 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).