Part A (9 marks)

Festivus Fashion Inc.'s charter authorizes the company to issue up to 300,000 common shares. As of January 1, 2020, Festivus's Fruits Inc.'s shareholders' equity section of the balance sheet reported the following:

Common shares (outstanding: 53,000 shares ) $689,000 During 2020, the following transactions related to shareholders' equity occurred, in the order given:

Mar 3: Reacquired and cancelled 7,000 common shares at $15 cash per share from shareholders. Apr 22: Declared and paid a 10% stock dividend when the market price per share was $16 per share. June 15: Declared a cash dividend of $2 per share to all shareholders of record on June 30. The dividend is payable July 5. July 5: Paid the dividend from June 15. There was no contributed surplus balance at the beginning of the year.

Required:

Provide the journal entries to record the above transactions, using the template file attached.

Part B (4 marks)

Susan Ross Corporation had the following share capital at the beginning of their 2020 fiscal year:

Common shares (outstanding, 46,000 shares) $460,000 Preferred shares (5% dividend; outstanding, 7,000 shares) $70,000 At the 2020 fiscal year -end, the board of directors decided to declare a total dividend of $25,000. No dividends were declared in 2019 or 2018.

Required:

Determine the breakdown in total dividends distributed between preferred shareholders and common shareholders, assuming:

i) the preferred shares are non-cumulative ii) the preferred shares are cumulative (assume the dividends were not in arrears at the beginning of 2018). Record your answers in the table included in the attached file.