Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver

Exercise 33

Computing dividends on preferred and common stock
Mode Skincare has 10,000 shares of 5%, $10 par value preferred stock, and 110,000 shares of $1.50 par common stock outstanding. During a three-year period, Mode declared and paid cash dividends as follows: 2010, $4,000; 2011, $10,000; and 2012, $20,000.
Requirements
1. Compute the total dividends to preferred and to common for each of the three years if
a. preferred is noncumulative.
b. preferred is cumulative.
2. For requirement 1.b., journalize the declaration of the 2012 dividends on December 22, 2012, and payment on January 14, 2013. Use separate Dividends payable accounts for preferred and common.