I.Derek Corporation was organized on January 1, 2018. During its first year, the corporation

issued 20,000 shares of $5 shares par value preferred stock and 200,000 shares of $1 par

value common stock. At December 31, the company declared the following cash dividends:

2018$4,000

2019$13,000

2020$28,000

INSTRUCTIONS:

a) Show the allocation of dividends to each class of stock, assuming the preferred

stock dividend is 5% and not cumulative.

b)Show the allocation of dividends to each class of stock, assuming the preferred

stock dividend is 7% and cumulative.

c)Journalize the declaration of the cash dividend at December 31, 2018 using the

assumption of part (b).