Question

Exercise 14-02 a-c Sunland Corporation was organized on January 1, 2019. During its first year, the corporation issued 2,000 shares of $50 par value preferred stock and 106,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2019, $6,500; 2020, $14,400; and 2021, $29,000. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and noncumulative. 2019 2020 2021 Allocation to preferred stock $ $ $ Allocation to common stock $ $ $

Answer 1

2019 2020 2021

Preferred dividend $6500 $7000 $7000

common dividend $0 $7400 $22000

total dividend $6500 $14400 $29000

Step-by-step explanation:

preferred dividend = (2000*$50 )$100000*7%= $7000

The preferred dividend are non cumulative meaning dividends in areas are disregarded.