Mowat Corporation Reported a Net Loss in 2015,its First Year

question 50

Essay

Mowat Corporation reported a net loss in 2015,its first year of operations,of $15,460; a net loss in 2016 of $12,350; and a net income of $152,700 in 2017.Mowat Corporation had outstanding throughout the three-year period the following issuances of shares:
$\begin{array}{lr}\text { \( \$ 5 \), cumulative preferred shares, 175 shares issued }&\$17,500\\\text { Common shares, 5,000 shares issued}&100,000\\\end{array}$
No dividends were declared in 2015 or 2016.
a_What is the amount of dividends in arrears at the beginning of 2017?
b_Assume that at the end of 2017,dividends of $70,025 were declared and paid.What total amount of dividends is paid to preferred shareholders and what total amount of dividends is paid to common shareholders?
c_What is the dividend per share paid to the preferred and common shareholders in 2017?
d_Prepare journal entries to declare and pay $70,025 dividends in 2017.

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