3. The Annapolis Corporation\'s stockholders\' equity accounts have the followin

Question

3. The Annapolis Corporation's stockholders' equity accounts have the following balances as of January 1, 2016: 12% preferred stock, cumulative, $50 p (10,000 shares issued and outstanding) Common stock, $10 par (100,000 shares issued and outstanding) Additional paid-in capital: common Retained carnings 500,000 1,000,000 1,000,000 3.150,000 $6,250000 Total stockholders' equity Annapolis engaged in the following dividend transactions during 2016, 2017, and 2018 2016: Dividends are in arrears for 2014 and 2015. On December 1,2016, the annual cash dividend plus the dividends in arrears were declared on the preferred stock. In addition, a $1.50 per share dividend was declared on the common stock. The dividends were paid on December 31, 2016. On December 1, 2017, the annual cash dividend on the preferred stock was declared. The dividend was paid on December 31, 2017. 2017: On December 10, a 30% stock dividend was declared on the common stock, distributable on January 25, 2018. The market price per share for the common stock on December 10, 2017, was $28. 2018: On January 25, 2018, the stock dividend declared on December 10, 2017, was issued. On December I, the annual cash dividend on the preferred stock was declared: it is payable on January 15, 2019 In addition, on December i, a 10% stock dividend was declared on the common stock, distributable on January 20, 2019. The market price per share for the common stock on December 1, 2018, was $23. No other stock transactions took place dusing 20:6, 2017, or 2018. Required Prepare the entries to record the dividend transactions for 2016, 2017, and 2018. (Do not record any transactions for 2019.)

Explanation / Answer

Journal Entries

date

explanation

debit

credit

2016

1-Dec

preferred dividend

180000

preferred dividend payable

180000

1-Dec

dividend-common stock

150000

dividend payable

150000

31-Dec

preferred dividend payable

180000

dividend payable

150000

cash

330000

2017

1-Dec

preferred dividend

60000

preferred dividend payable

60000

10-Dec

stock dividend

840000

stock dividend payable

840000

31-Dec

preferred dividend payable

60000

cash

60000

2018

25-Jan

stock dividend payable

840000

common stock

300000

additional paid in capital-common stock

540000

1-Dec

stock dividend

299000

stock dividend payable

299000

1-Dec

preferred dividend

60000

preferred dividend payable

60000

Journal Entries

date

explanation

debit

credit

2016

1-Dec

preferred dividend

180000

preferred dividend payable

180000

1-Dec

dividend-common stock

150000

dividend payable

150000

31-Dec

preferred dividend payable

180000

dividend payable

150000

cash

330000

2017

1-Dec

preferred dividend

60000

preferred dividend payable

60000

10-Dec

stock dividend

840000

stock dividend payable

840000

31-Dec

preferred dividend payable

60000

cash

60000

2018

25-Jan

stock dividend payable

840000

common stock

300000

additional paid in capital-common stock

540000

1-Dec

stock dividend

299000

stock dividend payable

299000

1-Dec

preferred dividend

60000

preferred dividend payable

60000

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