For the Year Ended December 31, 2020, Jovial Productions Inc

question 14

Essay

For the year ended December 31, 2020, Jovial Productions Inc. earned $13,000,000. Outstanding preferred shares included $1,500,000 in 9% cumulative preferred shares issued on January 1, 2017 and 32,000 $160 non-cumulative preferred shares issued on January 1, 2019 that are each entitled to dividends of $7 per annum. Dividends were neither declared nor paid on either class of the preferred shares in 2018 or 2019. On December 15, 2020, the company declared and paid $140,000 of the dividends in arrears on the 9% cumulative preferred shares.
Required:
Determine the net income available to ordinary shareholders for the year ended December 31, 2020.

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specified period, resulting in net profit or loss.

Debit Entries

Accounting entries that increase an asset or expense account, or decrease a liability or equity account.

Credit Entries

Bookkeeping records that increase liabilities or equity or decrease assets on a company's balance sheet.

Liability Account

A financial accounting account that represents obligations to pay debts or amounts owed to others.