The shareholders’ equity of Henry Byce Ltd. at the end of 2024 and 2023 appeared as follows:

Byce began operations in 2022. The 50,000 preferred shares issued have been outstanding since 2022. During 2024, Byce declared and paid a total of $275,000 in cash dividends.

Required 

a. Assume the preferred shares were not in arrears at December 31, 2023. How was the $275,000 in cash dividends distributed between the two types of shares in 2024? 

b. Assume the preferred share dividends were in arrears since 2022; that is, the dividends were not paid in 2022 and 2023. How was the $275,000 in cash dividends distributed between the two classes of shares? 

c. Provide journal entries to account for the changes to the shareholders’ equity of Henry Byce Ltd. in 2024, assuming the scenario from part (a).

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Share capital, preferred shares, 10% cumulative, 1,000,000 shares authorized, 50,000 shares issued Share capital, 5,000,000 common shares authorized, 2,500,000 common shares issued and outstanding (2023-1,000,000 shares issued and outstanding) Retained earnings Total shareholders' equity 2024 $ 875,000 7,250,000 4,675,000 $12,800,000 2023 $ 875,000 3,500,000 3,000,000 $7,375,000