Ex. 3 Derek Corporation was organized on January 1, 2003. During its first year, the corporation i value preferred stock and 200,000 shares of S1 par value common stock. At December 31, the company following cash dividends: ssued 20,000 shares of $5 par declared the 2003 S 5,000 2004 $15,000 2005 S35,000 Instructions (a) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 6% and not cumulative (b) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 8% and cumulative (c) Journalize the declaration of the cash dividend at December 31, 2005 using the assumption of part (b). Solution Preferred Common Total Preferred Common Total