1.

(TCO E) A primary source of stockholders' equity is (Points : 4)

income retained by the corporation. appropriated retained earnings. contributions by stockholders. both income retained by the corporation and contributions by stockholders.

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2. (TCO E) Which of the following represents the total number of shares that a corporation may issue

under the terms of its charter?
(Points : 4)

Authorized shares Issued shares Unissued shares Outstanding shares
0 1509694578 MultipleChoice 6

3. (TCO E) Norton Company issues 4,000 shares of its $5 par value common stock having a market

value of $25 per share, and 6,000 shares of its $15 par value preferred stock having a market value of $20 per share, all for a lump sum of $192,000. What amount of the proceeds should be allocated to the preferred stock? (Points : 4) (4,000 × $25) + (6,000 × $20) = $220,000 ($120,000 ÷ $220,000) × $192,000 = $104,727.

$172,000 $120,000 $104,727 $90,000

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4. (TCO F) Colson Inc. declared a $160,000 cash dividend. It currently has 6,000 shares of 7%, $100 par

value cumulative preferred stock outstanding. It is 1 year in arrears on its preferred stock. How much cash will Colson distribute to the common stockholders?

6,000 x 7% x 100 = $42,000 owed to preferred shareholders each year. 160,000 - 42,000 preferred dividends in arrears - 42,000 preferred current dividends =

000 $24.000 shares of no-par 8% preferred stock with a stated value of $5. None 0 1509694580 MultipleChoice 11 5.000 will be distributed as a dividend in the current year.000. $84.000. The preferred stock is cumulative and nonparticipating.A. how much will the preferred stockholders receive? (Points : 4) $21. $118.000.000 .000 outstanding shares of $2 par common stock and 60. has 300.000. Assuming that $63. (TCO F) Written. Dividends have been paid in every year except the past 2 years and the current year. $76. Inc. (Points : 4) $76.000 $48.000 $63.

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