05 Feb Reckless Phones Ltd. included the following shareh
Reckless Phones Ltd. included the following shareholders equity on its year-end balance sheet at December 31, 2014: Shareholders Equity Preferred shares, $0.25, cumulative, unlimited authorization, 10,000 shares issued and outstanding..$ 32,500 Common shares, unlimited authorization, 230,000 shares issued and outstanding.100,000 Retained earnings1,000,000 .$1,132,500 Required 1. Identify the different issues of shares that Reckless has outstanding. 2. Are the preferred shares cumulative or noncumalative? How can you tell? 3. Give two summary journal entries to record issuance of all the Reckless shares. All the shares were issued for cash. Explanations are not required. 4. Assume that preferred dividends are in arrears for 2013. Record the declaration of a $15,000 dividend on December 31, 2014. Use separate Dividends Payable accounts for preferred shares and common shares.