4. XYZ Co.'s Board of Directors announced, on March 10, 2022, they would pay $130,000...
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4. XYZ Co.'s Board of Directors announced, on March 10, 2022, they would pay $130,000 in dividends to stockholders. XYZ Co. has 50,000 shares of 6% Preferred Stock with a $10 par value outstanding. The Preferred stock is Cumulative and Nonparticipating. Assume XYZ Co. did not pay dividends in the prior year. On May 15th, the cash dividends were distributed. a) What is the journal entry XYZ Co. will prepare on March 10, 2020 (Date of Declaration) to recognize the commitment to pay dividends? b) What is the journal entry XYZ Co. will prepare on May 15th (Date of Dividend Payment) to recognize the cash payment to stockholders? c) What portion of the dividend distribution will go to Preferred Stockholders? What remaining portion will go to Common Stockholders
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