The following share capital information is available for a corporation with an April 30, The shares were issued when the corporation began operations on May 1, 2015. No dividends were declared during the fiscal years ended 2020 and 2021. On February, 28, 2022, the board of 2022. directors declared the required preferred share dividends and a $0.55 dividend for each of the common shares. The dividends are payable on April 1, 2022, to the shareholders of record on March 15, Preferred shares, $2.50 cumulative, 33,000 shares issued $1,000,000 Preferred shares, $3.50 noncumulative, 10,000 shares issued 600,000 Common shares, 170,000 shares issued 850,000 (a) Your answer is partially correct. Try again. How much will be paid to each class of shares? Year Cumulative Preferred Non-cumulative Preferred Common 2020 X 82,500.00 0 2021 82,500.00 2022 82,500.00 35000 93500Advantage / Disadvantage Characteristics 1. A corporation can continue to operate even if all of its shareholders have been replaced Advantage X Limited liability of shareholders v 2. Buying shares is an attractive way for individuals to invest in a company because the cash requirement is often very small Advantage Ability to acquire capital 3. Corporations issue shares in order to obtain capital (cash) Advantage Ability to acquire capital 4. In private corporations, creditors may demand a personal guarantee from a controlling shareholder Disadvantage v Limited liability of shareholders 5. Laws specify the requirements for issuing shares, distributing income to shareholders, and reacquiring shares Disadvantage Government regulations 6. No journal entry is required if a shareholder sells his or her shares to another investor Advantage Transferable ownerships rights 7. Respecting international, federal, provincial, and securities rules increases costs and complexity for corporations Disadvantage Government regulations 8. Shareholders cannot be made to pay for the company's liabilities out of their personal assets Advantage Limited liability of shareholders v 9. Shareholders may dispose of their interest in a corporation simply by selling their shares Advantage Transferable ownerships rights 10. Shareholders only pay income tax on corporation profits when they receive dividends Advantage Corporate income tax 11. The corporation acts under its own name Advantage Separate legal existence 12. The corporation may buy, own and sell property Advantage Separate legal existence 13. The liability of each shareholder is limited to the amount invested in the shares of the corporation Advantage Limited liability of shareholders 14. The sale of shares from one individual to another does not affect the corporation assets, liabilities, and total equity Advantage Transferable ownerships rights vThe major characteristics of a corporation are as follows: Separate legal existence Limited liability of shareholders Transferable ownerships rights Ability to acquire capital Continuous life Government regulations Corporate income tax The following items pertain to one of the characteristics of the corporate form of organization. For each item below, identify: (a) whether it represents an advantage or disadvantage, and (b) the characteristic that pertains to the iter. (Note: a characteristic can be used more than once.) (a) (b) Advantage / Disadvantage Characteristics 1. A corporation can continue to operate even if all of its shareholders have been replaced x Advantage Limited liability of shareholders v 2. Buying shares is an attractive way for individuals to invest in a company because the cash requirement is often very small Advantage Ability to acquire capital Advantage [Ability to acquire capital TLimited liability of shareholders vSage Hill Merchandising Inc. had the following share capital and balances on January 1, 2021. $2.50 cumulative preferred shares, convertible into common shares at a ratio of 4 common shares for 1 preferred share, unlimited number of shares authorized, 140,000 shares issued $2,338,000 Common shares, unlimited number of shares authorized, 600,000 shares issued 2,160,000 The following transactions relating to shares occurred in 2021 and 2022. Mar 31, 2021 Sage Hill declared total annual dividends of $800,000 for shareholders of record on April 1, 2021. There were no dividend arrears at January 1, 2021. April 30, 2021 Sage Hill paid the dividends owing. July 10, 2021 Shareholders converted 25,000 preferred shares into common shares. The fair value per preferred share was $17.90; per common share, $4.90. Feb. 20, 2022 Sage Hill declared an annual dividend of $650,000 to shareholders of record on March 1, 2022. Mar. 5, 2022 Sage Hill paid $350,000 of the dividends owing. July 15, 2022 Shareholders converted 50,000 preferred shares into 200,000 common shares. The fair value per preferred share was $17.00; per common share, $5.40.Journalize each of the transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manual for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Mar. 31, 2021 Apr. 30 July 10 Feb. 20, 2022 Mar. 5 July 15