Question 1. (20 Marks) The following is the shareholders' equity section of Whispering Winds Corp. at December 31, 2020: Preferred shares, a authorized 100,000 shares; issued 21,000 shares $ 630,000 Common shares (unlimited authorized, 64,000 issued) 1,600,000 Contributed surplus 121,000 Total paid-in capital 2,351,000 Retained earnings 2,027,500 Total shareholders' equity $4,378,500 * The preferred shares have a $2 dividend rate, are cumulative, and participate in distributions in excess of a $3 dividend on the common shares. Required: a) No dividends were paid in 2018 or 2019. On December 31, 2020, Whispering Winds wants to pay a cash dividend of $5 per share to common shareholders. How much cash would be needed for the total amount to be paid to preferred and common shareholders? (15 marks) b) The company decides instead that it will declare a 15% stock dividend on the outstanding common shares at their fair value. The common shares' fair value on the date of declaration is $45 per share. Prepare the entry on the date of declaration. (2 marks) c) The company decides instead to acquire and cancel 10,700 common shares at the current fair value of $45 per share. Prepare the entry to record the retirement, assuming the contributed surplus balance arose from previous cancellations of common shares. (3 marks) Question 1. (20 Marks) The following is the shareholders' equity section of Whispering Winds Corp. at December 31, 2020: Preferred shares, a authorized 100,000 shares; issued 21,000 shares $ 630,000 Common shares (unlimited authorized, 64,000 issued) 1,600,000 Contributed surplus 121,000 Total paid-in capital 2,351,000 Retained earnings 2,027,500 Total shareholders' equity $4,378,500 * The preferred shares have a $2 dividend rate, are cumulative, and participate in distributions in excess of a $3 dividend on the common shares. Required: a) No dividends were paid in 2018 or 2019. On December 31, 2020, Whispering Winds wants to pay a cash dividend of $5 per share to common shareholders. How much cash would be needed for the total amount to be paid to preferred and common shareholders? (15 marks) b) The company decides instead that it will declare a 15% stock dividend on the outstanding common shares at their fair value. The common shares' fair value on the date of declaration is $45 per share. Prepare the entry on the date of declaration. (2 marks) c) The company decides instead to acquire and cancel 10,700 common shares at the current fair value of $45 per share. Prepare the entry to record the retirement, assuming the contributed surplus balance arose from previous cancellations of common shares