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Rizzo Corporation has 40,000 shares of $50 par value, 3%, preferred stock (P/S) and 180,000...

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Accounting

Rizzo Corporation has 40,000 shares of $50 par value, 3%, preferred stock (P/S) and 180,000 shares of $5 par value common stock (C/S) outstanding at December 31, 2020. All events are in chronological time order below.

Required: Answer the questions in each of the following (chronological) situations.

5a) Assuming that the cost method is used by Rizzo, what entry is recorded if 9,000 shares of common stock are reacquired for a stock option plan when the market price is $22 per share?

5b) Assume the preferred stock is not participating and not cumulative, and ones years P/S dividend is in arrears (was not paid). A 6% cash dividend is declared for C/S holders. Please compute the amount of C/S & P/S dividends to be paid, and provide the entry (list separately) for the declaration of the dividends on both the C/S and P/S.

5c) Rizzo reissues (sells) 500 shares of T/S for $25 per share. What entry should be recorded by Rizzo assuming the cost method is used?

5d) Assume that Rizzo now reissues (sells) 500 shares of T/S for $18 per share. Please provide the entry that would be made in this case.

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