Question
TNA is a private company. We have issued both common and preferred shares to a select number of investors close to the business. Unfortunately, we
"TNA" is a private company. We have issued both common and preferred shares to a select number of investors close to the business. Unfortunately, we had a net loss in 2017 of $15,460; a net loss in 2018 of $12,350 so the Board did not declare any dividends in 2017 and 2018. Good news is, that we had net income of $152,700 in 2020, and the Board finally declared dividends during a meeting in December of 2019. We have had the following balances in the last 3 years. $5, cumulative preferred shares, 175 shares issued $15,500 Common shares, 5,000 shares issued $90,000 Required a) What is the amount of dividends in arrears at the beginning of 2019? (2 marks) b) Assume that at the end of 2019, dividends of $60,025 were declared. What total amount of dividends would be paid to preferred shareholders and what total amount of dividends would be paid to common shareholders? (2 marks) c) Prepare journal entries to declare $60,025 dividends in 2019. (3 marks) d) Prepare the partial balance sheet for Top Notch Appliances, Shareholder's Equity section, for Dec 31, 2019. Assume that the beginning balance in retained earnings was $452,600. (6 marks) e) On Jan 5, 2020, the Company issued the following: a. an additional 200 common shares at a stated price of $25/share; b. an additional 25 of $5 cumulative preferred shares, at a price of $124/share Please record. (4 marks) PLEASE SHOW YOUR WORK FOR FUL
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