E15.18B (LO 1,2,3,4) (Dividends and Stockholders' Equity Section) Focus Foot Company reported the following amounts in the stockholders' equity section of its December 31, 2019, balance sheet: Preferred stock, 12%, $100 par (100,000 shares authorized, 25,000 shares issued) $2,500,000 Common stock, $1 par (1,000,000 shares authorized, 300,000 shares issued) 300,000 Additional paid-in capital 950,000 Retained earnings 1,365,000 Total $5,115,000 During 2020, Focus Foot took part in the following transactions concerning stockholders' equity: 1. Paid the annual 2019 dividend on preferred stock and a 50.50 per share dividend on common stock. These dividends had been declared on December 31, 2019. 2. Purchased 1,000 shares of its own outstanding common stock for $8 per share. Focus Foot uses the cost method. 3. Reissued 1,000 treasury shares for land with an appraised value of $9,500. Focus Foot's common shares were trading for $8.50 per share. 4. Issued 50,000 shares of common stock at $9 per share. 5. Declared and recorded a 2:1 stock split on the outstanding common stock when the stock is selling for $10 per share. 6. Declared the annual 2020 dividend on preferred stock and the $0.50 per share dividend on common stock. These divi- dends are payable in 2021. Instructions (a) Prepare journal entries to record the transactions described above. (b) Prepare the December 31, 2020, stockholders' equity section. Assume 2020 net income was $665,000. E15.21B (LO 5) (Preferred Dividends) The outstanding capital stock of York Brands Corporation consists of 10,000 shares of $75 par value, 10% preferred, and 25,000 shares of $1 par value common. Instructions Assuming that the company has net income of $250,000, all of which is to be paid out in dividends, and that preferred dividends were not paid during the current year or the past year, state how much each class of stock should receive under each of the following conditions: (a) The preferred stock is noncumulative and fully participating. (b) The preferred stock is cumulative and nonparticipating. (c) The preferred stock is cumulative and fully participating