Grand Masters Inc.

Partial Balance Sheet

December 31, 2019

Shareholders' Equity

Contributed Capital:

Preferred shares, $1.00, 100,000 shares authorized, 10,000

shares issued$200,000

Common shares, unlimited number of shares authorized,

50,000 shares issued350,000

Total contributed capital550,000

Retained earnings270,000

Total shareholders' equity$820,000

(A) Refer to the above.Assume that the preferred shares arecumulativeand that there have been no dividends declared in 2016, 2017 and 2018.Prepare the journal entry to record the declaration and payment of a dividend in the total amount of $75,000, on December 3, 2019.

Required:Use separate dividends payable accounts for preferred and common shares to prepare entries on

(a) declaration date on Dec 3 2019

(b) Date of Record on Dec 15 2019 and

(c) Payment date on Dec 30 2019.

(B) Refer to the above.Assume that the preferred shares arenon-cumulativeand that there have been no dividends declared in 2017 and 2018.Prepare the journal entry to record the declaration and payment of a dividend in the total amount of $75,000, on December 3, 2019.

Required:Use separate dividends payable accounts for preferred and common shares to prepare entries on

(a) declaration date on Dec 3 2019

(b) Date of Record on Dec 15 2019 and

(c) Payment date on Dec 30 2019.