Common stock dividends
The 2006 annual report for Sneers Corporation disclosed that the company declared and paid preferred dividends in the amount of $119.9 million in 2006. It also declared and paid dividends on common stock in the amount of $2 per share. During 2006, Sneers had 1,000,000,000 shares of common authorized; 387,570,300 shares had been issued; 41,670,300 shares were in treasury stock. The balance in Retained earnings was $1,554 million on December 31, 2005, and 2006 Net income was $858 million.
Prepare journal entries to record the declaration, and payment, of dividends on (a) preferred and (b) common stock.
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