Question Details

annual dividend on the preferred stock




1.	Outstanding stock of the Core Corporation included 20,000 shares of $5 par common stock and 10,000 shares of 5%, $10 par noncumulative preferred stock. In 2012, Core declared and paid dividends of $4,000. In 2013, Core declared and paid dividends of $12,000. How much of the 2013 dividend was distributed to preferred shareholders?
a.	$7,000
b.	$4,000
c.	$5,000
d.	None of the above


2.	On January 1, Collins Corporation had 800,000 shares of $10 par value common stock outstanding. On March 31, the company declared a 15% stock dividend. Market value of the stock was $15/share.  As a result of this event,
a.	Collins’ Paid-in Capital in Excess of Par account increased $600,000.
b.	Collins’ total stockholders’ equity was unaffected.
c.	Collins’ Stock Dividends account increased $1,800,000.
d.	All of the above.



	3.	On January 1, Edison Corporation had 1,000,000 shares of $10 par value common stock outstanding. On March 31, the company declared a 20% stock dividend. Market value of the stock was $15/share.  As a result of this event,
a.	Edison- Paid-in Capital in Excess of Par account increased $1,000,000.
b.	Edison- total stockholders’ equity was unaffected.
c.	Edison- Stock Dividends account increased $3,000,000.
d	All of the above.



	4.	Start Inc. has 5,000 shares of 6%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2013. What is the annual dividend on the preferred stock?
a.	$60 per share
b.	$30,000 in total
c.	$50,000 in total
d.	$0.60 per share


	5.	Arm, Inc., has 10,000 shares of 6%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2013. If the board of directors declares a $200,000 dividend, the
a.	preferred stockholders will receive 1/10th of what the common stockholders will receive.
b.	preferred stockholders will receive the entire $200,000.
c.	$60,000 will be held as restricted retained earnings and paid out at some future date.
d.	preferred stockholders will receive $60,000 and the common stockholders will receive $140,000.






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