Hodge Corporation issued 117,000 shares of $18 par value, cumulative, 8% preferred stock on January 1, 2014, for $2,682,000. In December 2016, Hodge declared its first dividend of $833,300.
Prepare Hodge’s journal entry to record the issuance of the
preferred stock. (Credit account titles are automatically indented
when amount is entered. Do not indent manually. If no entry is
required, select "No entry" for the account titles and enter 0 for
the amounts.)
Account Titles and Explanation
Debit
Credit
SHOW LIST OF ACCOUNTS
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If the preferred stock is not cumulative, how much of the
$833,300 would be paid to common stockholders?
Common Stock Dividends
$
SHOW LIST OF ACCOUNTS
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If the preferred stock is cumulative, how much of the $833,300
would be paid to common stockholders?
Common Stock Dividends
$
Prepare Hodge’s journal entry to record the issuance of the preferred stock.
Cash | $2,682,000 | |
preferred stock ( 117000 * 18 ) | 2106000 | |
Additional Paid up capital - preferred stock | 576000 |
If the preferred stock is not cumulative, how much of the $833,300 would be paid to common stockholders?
First dividend will be paid to preferred stockholders :- 2106000 * 8 % = $ 168480
Remaining will be distributed as Common Stock Dividends = 833300 - 168480 = $ 664820
If the preferred stock is cumulative, how much of the $833,300 would be paid to common stockholders?
First dividend will be paid to preferred stockholders :- 2106000 * 8 % * 3 years ( since there is arrear for 2 years ) = $ 505440
Remaining will be distributed as Common Stock Dividends = 833300 - 505440 = $ 327860
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