Burlington Clothes was incorporated on October 1, 2014. The articles of incorporation indicated the company was authorized to issue 600,000 shares of no par value common shares and 200,000, $2 preferred shares that are cumulative and participating in distributions in excess of 5% of a dividend rate on the common shares. The companys year-end is September 30. The following information relates to the companys shareholders equity account.

1) 80,000 common shares issued for cash on October 1, 2014, at $60 per share.

2) 20,000 $2 preferred shares were issued on October 1, 2014 at $80 per share.

3) 10,000 common shares exchanged on Dec 15, 2014, for land in the downtown core. The land had originally cost the seller $300,000 and had an estimated fair value of $550,000 on Dec 15, 2014 when Burlingtons share were selling for $58.

4) 10,000 common shares issued on June 1, 2015 for $55

5) October 1, 2014: subscriptions were received for 8,000 common shares at $60 per share. The first installment of $200,000 was received on this date and the final installment was paid on September 30, 2017.

6) November 1, 2016: the company purchased 4,000 of its common shares at $58 per share and restored these shares to the status of authorized but unissued.

7) December 1, 2016: the company declared a 5% stock dividend for shareholders of record on January 1, 2017. The company was short on cash and therefore could not pay a cash dividend. The companys shares were selling at $57 per share on December 1, 2016.

8) March 15, 2017: the company sold 10000 common shares for $450,000.

9) Dividends:

Burlington did not declare any dividends until September 30, 2016. At that date total dividends of $500,000 were declared.

10) The company incurred the following profits (loss) since incorporation:

2015 (25,000)

2016 675,000

2017 400,000

Required:

a) Determine the amount of dividends received by preferred and common shareholders from the September 30, 2016 declaration.

b) Prepare the journal entries for 2016-17 fiscal year.

c) Prepare the statement of changes in equity and the shareholders equity section of the balance sheet for September 30, 2017.