Question

Buildex Corporation's balance sheet reported the following shareholders' equity as of December 31, 2021: Shareholders’ Equity...

Buildex Corporation's balance sheet reported the following shareholders' equity as of December 31, 2021:

Shareholders’ Equity

Share capital:

Preferred shares, $ 4 cumulative, 30,000 shares

                 authorized, 4,000 shares issued                                                       $   850,000

Common shares, unlimited shares authorized,

                 175,000 shares issued                                                                           1,350,000

Total share capital                                                                                                 $ 2,000,000

Retained earnings                                                                                                        300,000

Total shareholders' equity                                                                                   $ 2,300,000

Additional information:

No dividends were declared in the prior year - 2020. Dividends were fully paid in all year prior to 2020.   Buildex declared a total cash dividend of $ 80,000 on December 31, 2021.

Required

a)      Determine the dividend amount allocated to common and preferred shares.

b)      Record the journal entry for the declaration of the dividend.

c)      Determine the dividend amount allocated to common shares IF the preferred shares were non-cumulative.

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