P8-51b teak OUTDOOR FURNITURE LIMITED INCLUDED THE FOLLOWING SHAREHOLDERS EQUITY. IN ITS YEAR-END BALANCE SHEET AT FEBRUARY 28,2020:

SHAREHOLDERS' EQUITY

PREFERRED SHARES, $1.10 CUMULATIVE,AUTHORIZED 100,000 SHARES IN EACH CAPITAL

CLASS A-------ISSUED 75,000 SHARES------------------------------------------------------$1,500,000

CLASS B-------ISSUED 92,000 SHARES------------------------------------------------------ 1,840,000

COMMON SHARES:AUTHORIZED 1,000,000 SHARES, ISSUED 280,000 SHARES. 6,940,000

RETAINED EARNINGS-----------------------------------------------------------------------------------8,330,000

$ 18,610,000

REQUIREMENT

1. IDENTIFY THE DIFFERENT ISSUES OF SHARES THAT TEAK OUTDOOR FURNITURE LIMITED HAS OUTSTANDING.

2. GIVE THE SUMMARY ENTRIES TO RECORD ISSUANCE OF ALL TEAK SHARES. ASSUME THAT ALL SHARES WERE ISSUED FOR CASH.

3. SUPPOSE TEAK DID NOT PAY ITS PREFERRED DIVIDED FOR THREE YEARS. WOULD THE COMPANY HAVE TO PAY THOSE DIVIDENDS

IN ARREARS BEFORE PAYING DIVIDENDS TO THE COMMON SHAREHOLDERS? GIVE YOUR REASON.

4. WHAT AMOUNT OF PREFERRED DIVIDENDS MUST TEAK DECLARE AND PAYS EACH YEAR TO AVOID HAVING PREFERRED DIVIDENDS IN ARREARS?