QUESTION 5 (8 Marks) Part A (4 Marks) Smith Company had sales of $3,000,000 for the year ending December 31, 2021. All products sold are subject to warranty with an estimated warranty cost of 3%. The estimated warranty payable at the beginning of 2021 was $30,000 and warranty payments during 2021 totalled $42,000. All warranty payments are in cash. Required: Calculate the amount of the warranty liability to appear on the December 31, 2021 balance sheet. Part B (4 Marks) The Davis Company reported the following as of December 31, 2021: Preferred Shares, Cumulative, $1.50, 50,000 shares issued $ 800,000 Common Shares, 400,000 shares issued $2,200,000 Davis had experienced a downturn in business in both 2019 and 2020 and was not able to pay any dividends. Business returned to normal in 2021 and Davis declared dividends totalling $425,000. Required: 1. Calculate the amount of dividends paid to Preferred Shareholders in 2021 2. Calculate the amount of dividends paid to Common Shareholders in 2021