Kingbird Inc. has recorded all necessary adjusting entries, except for income tax expense, at its fiscal year end, July 31, 2021. The following information has been taken from the adjusted trial balance:

BTL Incorporated had common shares and 65,000, $2.50 preferred shares issued. BTL did not pay a dividend to the preferred shareholders in 2020 and 2021.

Determine the dividends in arrears, if any, at December 31, 2021 if

a)		The preferred shares were noncumulative, and		$
b)		The preferred shares were cumulative.		$

Assuming the preferred shares were cumulative and BTL declared payment of all dividends in arrears on December 31, 2021, prepare the necessary journal entry. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2021

Assuming the preferred shares were cumulative and BTL declared payment of $185,000 on December 31, 2021, how much of the dividends in arrears would be paid and what is still in arrears?

Dividends paid		$
Dividends in arrears		$

All accounts have normal balances and total assets equal $819,500. Kingbird has a 20% income tax rate.

Prepare closing entries.

(Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
July 31	enter an account title to close revenue account	enter a debit amount	enter a credit amount
	enter an account title to close revenue account	enter a debit amount	enter a credit amount
	(To close revenue account.)
July 31	enter an account title to close expense accounts	enter a debit amount	enter a credit amount
	enter an account title to close expense accounts	enter a debit amount	enter a credit amount
	enter an account title to close expense accounts	enter a debit amount	enter a credit amount
	enter an account title to close expense accounts	enter a debit amount	enter a credit amount
	enter an account title to close expense accounts	enter a debit amount	enter a credit amount
	enter an account title to close expense accounts	enter a debit amount	enter a credit amount
	(To close expense accounts.)
July 31	enter an account title to close Income Summary	enter a debit amount	enter a credit amount
	enter an account title to close Income Summary	enter a debit amount	enter a credit amount
	(To close Income Summary.)
July 31	enter an account title to close dividends	enter a debit amount	enter a credit amount
	enter an account title to close dividends	enter a debit amount	enter a credit amount
	(To close dividends.)