Exercise 10-67 Cash Dividends on Common and Preferred Stock Lemon Inc. has the following information regarding its preferred and common stock: Preferred stock, $30 par, 12% cumulative; 300,000 shares authorized; 150,000 shares issued and outstanding Common stock, $2 par; 2,500,000 shares authorized; 1,200,000 shares issued; 1,000,000 outstanding As of December 31, 2019Lemon was 3 years in arrears on its dividends. During 2020, Lemon declared and paid dividends. As a result, the common stockholders received dividends of $0.45 per share. Required: 1. What was the total amount of dividends declared and paid during 20207 Total dividends declared and paid $ Feedback Check My Work 1. Preferred shareholders generally must be paid their entire dividends owed, which is calculated based on the features of the preferred stock issue, before the common shareholders receive any dividends. 2. During 2020, what journal entry was made at the date of declaration? Retained Earnings (or Dividends) Dividends Payable (Record liability for dividends) Feedback Check My Work 2. The obligation incurred at the date of declaration is retired when the dividends are paid Feedback