The following elements of stockholders equity are from the balance sheet of Sandler Marketing Corp. Stockholders Equity

Question:

The following elements of stockholders’ equity are from the balance sheet of Sandler Marketing Corp.

Stockholders’ Equity

Paid-In Capital:

Preferred Stock—7%, $ 2 Par Value; 100,000 shares

authorized, 75,000 shares issued and outstanding ......$150,000

Common Stock—$ 0.10 Par Value; 10,250,000 shares

authorized, 9,500,000 shares issued and outstanding ...... 950,000

Sandler paid no preferred dividends in 2013.

Requirement

1. Compute the dividends to the preferred and common shareholders for 2014 if total dividends are $ 195,000 and assuming the preferred stock is noncumulative.

2. Record the journal entries for 2014 assuming that Sandler Marketing Corp. declared the dividend on July 1 for stockholders of record on July 15. Sandler paid the dividend on July 31.

Balance Sheet
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