Unit 1 Lab--Principles of Accounting II

Exercise 14-02 a-c

Pharoah Corporation was organized on January 1, 2019. During its first year, the corporation issued 2,000 shares of $50 par value preferred stock and 103,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2019, $5,500; 2020, $13,700; and 2021, $28,500.

1. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 6% and noncumulative.

2. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 9% and cumulative.

3. Journalize the declaration of the cash dividend at December 31, 2021, under part (b)