QUESTION #6 The stockholders\' equity section of Ellis Corporation at December 3

Question

QUESTION #6 The stockholders' equity section of Ellis Corporation at December 31, 2017, included the following: 6% preferred stock, $100 par value, cumulative, 10,000 shares authorized, 8,000 shares issued and outstanding Common stock, $10 par value, 250,000 shares authorized, 200,000 shares issued and outstanding.... 800,000 Dividends were not declared on the preferred stock in 2017 and are in arrears. On September 15, 2018, the board of directors of Ellis Corporation declared dividends on the preferred stock for 2017 and 2018, to stockholders of record on October 1, 2018, payable on October 15, 2018. On November 1, 2018, the board of directors declared a $.90 per share dividend on the common stock, payable November 30, 2008, to stockholders of record on November 15, 2018. Instructions Prepare the journal entries that should be made by Ellis Corporation on the dates indicated below: September 15, 2018 October 1, 2018 October 15, 2018 November 1, 2018 November 15, 2018 November 30, 2018

Explanation / Answer

Journal entries: Date Accounts title and explanations Debit $ Credit $ 15-Sep Preferred Dividend Account Dr. 96000     Preferred Dividend payable (8000 shares @6)*2 years 96000 1-Oct No entry 15-Oct Preferred Dividend payable Dr. 96000       Cash account 96000 1-Nov Common Stock dividend Dr. 180000    Common dividend payable Account (200000 shares @ 0.90) 180000 15-Nov No entry 30-Nov Common dividend payable Account Dr. 180000       Cash account 180000

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