Superior Outdoor Furniture Company included the following stockholders’ equity on its year-end at February 28, 2019:
Requirements
1. Identify the different issues of stock that Superior Outdoor Furniture Company has outstanding.
2. Give the summary entries to record the issuance of all the Superior stock. Assume that all the stock was issued for cash. Explanations are not required.
3. Suppose Superior passed its preferred dividends for three years. Would the company have to pay those dividends in arrears before paying dividends to the common stockholders? Give your reasons.
4. What amount of preferred dividends must Superior declare and pay each year to avoid having preferred dividends in arrears?
5. Assume that preferred dividends are in arrears for 2017. Journalize the declaration of an $900,000 on February 28, 2019. An explanation is not required.
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