Chapter 13-25 Submit Assignment Due May 1 by 11:59pm Points 10 Submitting a text

Question

Chapter 13-25 Submit Assignment Due May 1 by 11:59pm Points 10 Submitting a text entry box or a file upload Available Jan 8 at 12am - May 1 at 11:59pm 4 months E13-25 Computing dividends on preferred and common stock and journalizing Learning Objective 4 1. Preferred Dividend 2016 $7,680 Horizon Communications has the following stockholders' equity on December 31, 2016: Stockholders' Equity Paid-In Capital: Preferred Stock-496, $11 Par Value: 150,000 shares authorized, 22,000 shares issued and outstanding Common Stock-$4 Par Value; 575,000 shares 242,000 authorized, 350,000 shares issued and outstanding Paid-In Capital in Excess of Par-Common Total Paid-In Capital 1,400,000 1,050,000 2,692,000 220,000 $2,912,000 Retained Earnings Total Stockholders' Equity Copyright O2016 Pearson Education, Inc. Requirements

Explanation / Answer

Solution E 13-25 - Part 1:

Annual dividend on preferred stock = $242,000*4% = $9,680

Total dividend paid in 2016 = $7,680

Therefore dividend will be paid to preferred stock in 2016 first.

Therefore dividend in arrear for 2016 for preferred stock = $9,680 - $7,680 = $2,000

Amount paid to common shareholder as dividend in 2016 = 0

Total dividend paid in 2017 = $49,000

Dividend paid to preferred stock in 2017 = $7,680 +$2,000 = $9,680

Dividend paid to common stock in 2017 = $49,000 - $9,680 = $39,320

Solution E 13-25 - Part 2:

Solution E 13-28:

Journal Entries - Horizon Communication Date Particulars Debit Credit 1-Dec-16 Retained Earnings Dr $7,680.00          To Dividend Payable $7,680.00 (Being dividend declared on preferred stock) 10-Dec-16 No Entry 20-Dec-16 Dividend Payable Dr $7,680.00          To Cash $7,680.00 (Dividend paid to preferred stock)

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