Jupp Jellies runs a large operation on Saturn under a separate corporate entity, Titanic, Inc., and an

independent local management team. However, all strategic decisions are made by the home company.

Titan had reported a net income of $1,700,000 for 2018, a capital structure of 225,000 common shares

with a contributed capital of $5,500,000; and 200,000 cumulative preferred shares with a contributed

capital of $2,000,000. Preferred share holders would receive a minimum dividend of $2.20 but held

participative rights in the distribution of excess dividends. The last dividends declared by Titanic were in

2014.

In view of the excellent earnings for the past three years, the Titan management decided to declare a

dividend for 2018. It decided that the common share holders would be entitled to a dividend of $9.00 per

share and the preferred share holders could participate in the excess based on the dividends to common

shareholders exceeding $5.80 per share.

You took a quick glance at the information submitted and agreed to his proposal. He drew a long sigh of

relief. I am so glad you saved my job. Lunch is on me, he stated gratefully. Following a most

sumptuous meal of space burgers, a Martian red salad and a jelly shake, you settle down to resolving the

questions contained in his list below.

Required:

You were asked to prepare a well formatted schedule showing the following:

a] The total amount of dividends which the management would declare; and

b] The total amounts payable to each group of shareholders.

c] The appropriate journal entry made upon the declaration of the dividend.