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Unformatted text preview: ligible to receive dividends. Since Enerson has 375,000 shares of common stock issued, but 50,000 of those shares are held in treasury, the total number of common shares outstanding and, hence, eligible for a dividend are 325,000 shares. b. Date of declaration Cash Dividend (–SE) 3,900,000 Dividend Payable (+L) 3,900,000 Declared cash dividend. Date of record No journal entry is necessary. Date of payment Dividend Payable (–L) 3,900,000 Cash (–A) 3,900,000 Paid cash dividend. E12–13 a. Each year the preferred stockholders are entitled to $5 for each share of preferred stock outstanding. Since 5,000 shares are outstanding, total dividends to preferred stockholders should be $25,000 per year. Year 2008 Dividends Declared $ Dividends to Preferred 0 $ Dividends to Common 0 25,000 (for 2008) (for 2009) $ 2009 30,000 5,000 2010 80,000 20,000 (for 2009) 25,000 (for 2010) 35,000 2011 15,000 0 2012 40,000 10,000 (for 2011) 25,000 (for 2012) 15,000 (for 2011) 0 5,000 0 E12–13 Concluded b. Dividends in arrears are...
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