Handout 12-3: Garden State Corp. On June 1, 2012, Garden State issued 10,000 shares of $10 par preferred stock for $19 per share. Record the journal entry for the stock issuance. June. 1 The stock pays a cumulative annual dividend of 7% of par value. What was the annual fixed dividend for preferred stockholders? Complete the following table to explain how dividends were allocated between preferred and common stockholders. Year To Preferred To Common Total Dividend Stockholders Stockholders 2012 $100,000 2013 $5,000 2014 $10,000 2015 $0 2016 $20,000 If the preferred stock has the non-cumulative feature, how dividends were allocated between preferred and common stockholders? To Preferred To Common Year Total Dividend Stockholders Stockholders 2012 $100,000 2013 $5,000 2014 $10,000 $0 2015 2016 $20,000 Exercise 1: Allocating Dividends to Preferred and common Stocks Bates Corp. has 7,000 shares of $100 par, 5% cumular preferred stock outstanding and 50.000 shares of se stock outstanding. If the board of directors declares total dividends and the company did not pay divi previous year. How much of the $100.000 will be po preferred shareholders? How much will be paid to the shareholders? o shares of $1 par common ectors declares $100,000 of d not pay dividends the 000 will be paid to the will be paid to the common Exercise 2: On January 1, 2012, Elder Co. issued 50,000 shares of $10 par preferred stock for $20 per share. The stock pays a cumulative annual dividend of 5% of par value. 1. What was the annual fixed dividend for preferred stock holders? 2. Allocate the dividends between preferred and common stock holders? Year Total Dividend To Preferred Stockholders To Common Stockholders 2012 2013 2014 2015 2016 $ 20,000 $ 45,000 $0 $ 70,000 $ 55,000 3. Allocate the dividends between preferred and common stock holders, assuming that the dividend feature is non-cumulative? Year Total Dividend To Preferred Stockholders To Common Stockholders 2012 2013 2014 2015 2016 $ 20,000 $ 45,000 $ 0 $ 70,000 $ 55,000