Orlov Company has shares outstanding as follows:
Common, no par value, 150,000 shares outstanding, $1,150,000;
Preferred, $6, no par value, 5,000 shares outstanding, $500,000.
The Preferred is cumulative and participating up to an additional 4%; two years are in arrears (not including the current year); and the total amount of cash dividends declared for both shares classes is $240,000.
Instructions
Prepare the entry for the dividend declaration, separating the dividend into the common and preferred portions. Show all calculations.