Early in 2008, Robbinsville Press was organized with authorization to issue 100,000 shares of $100 par value preferred stock and 500,000 shares of $1 par value common stock. Ten thousand shares of the preferred stock were issued at par, and 170,000 shares of common stock were sold for $15 per share. The preferred stock pays an 8 percent cumulative dividend.
During the first four years of operations (2008 through 2011), the corporation earned a total of $1,085,000 and paid dividends of 75 cents per share in each year on its outstanding common stock.
Prepare the stockholders’ equity section of the balance sheet at December 31, 2011.
I need help with the retained earnings section. I don’t understand how to come up with the dividends.
Net Income =1085000
Less Common dividends???
Less Preferred Dividends???