Baur Company has 21,000 shares of $10 par value, 8% preferred stock and 500,000 shares of...

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Accounting

Baur Company has 21,000 shares of $10 par value, 8% preferredstock and 500,000 shares of $1 par value common stock outstanding.As of December 31, 2018, it had $900,000 of Retained earnings. OnDecember 31, 2018, the Board of Directors is considering thedistribution of a cash dividend to the common and preferredstockholders. No dividends were declared in 2016 and 2017 and nodividends were in arrears prior to 2016. The company is consideringthe following options.
Option 1 The preferred stock is noncumulative and the dividendfor 2018 would be $30,000.
Option 2 The preferred stock is cumulative and the dividendswould be $30,000.
Option 3 The preferred stock is cumulative and the dividendswould be $75,000.
Required: For each scenario, determine the dollar amount ofdividends that would be paid to each class of stockholder.
Define the following as they pertain to dividend distribution:a. Date of declaration b. Date of record c. Date of payment
On which of these dates (date of declaration, date of record ordate of payment) would a company NOT make a journal entry?

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Following Details are given 21000 shares 8 Preferred Stock of 10 par value 500000 shares common stock of 1 par value Now the Solution is Option 1 If the preferred stock is noncumulative and the dividend for 2018 would be 30000 then total dividend of 30000 will be given to common stockholder as noncumulative preferred stock does not issue any See Answer

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