Question: Classic Outdoor Furniture Company included the
Classic Outdoor Furniture Company included the following stockholders’ equity on its year-end balance sheet at February 28, 2017: 
Requirements 1. Identify the different issues of stock that Classic Outdoor Furniture Company has outstanding. 2. Give the summary entries to record issuance of all the Classic stock. Assume that all the stock was issued for cash. Explanations are not required. 3. Suppose Classic 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 Classic declare and pay each year to avoid having preferred dividends in arrears? 5. Assume that preferred dividends are in arrears for 2016. Journalize the declaration of an $870,000 dividend on February 28, 2017. An explanation is not required.
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Stockholders' Equity Preferred stock, 6.0% cumulative-par value $35 per share; authorized 130,000 shares in each class Class A-issued 79,000 shares.. Class B-issued 89,000 shares.. Common stock-$5 par value: authorized 1,750,000 shares, issued 240,000 shares . Additional paid-in capital-common Retained carnings.. $ 2,765,000 3,115,000 1,200,000 5,540,000 8,350,000 $20,970,000
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