1. Occidental Produce Company has 40,000 shar

1. Occidental Produce Company has 40,000 shar

1. Occidental Produce Company has 40,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding. The common stock is $0.01 par value; the preferred stock is 4% non-cumulative, with $100 par value. On October 15, 2014, the company declares a total dividend payment of $40,000. What is the total amount of dividends that will be paid to the common shareholders? (Points : 1) $40,000$32,000$ 400$ 4,500None of these is correct2. Which of the following is a TRUE statement about a corporation? (Points : 1) The owners of a corporation have co-ownership of the property of the corporation.A corporation is not taxed on the corporations business income.A corporation has a limited life.The owners of a corporation have limited liability for the corporations debts.3. The purchase of treasury stock requires a credit to the Common stock account. (Points : 1) True False 4. Which of the following is an advantage of preferred stock? (Points : 1) Preferred shareholders are guaranteed that they will not take a loss on their investment.Preferred shareholders have higher voting rights than common shareholders.Preferred shareholders may sell their shares for a price higher than that of common stock.Preferred shareholders have the first claim on dividend funds.5. All forms and classes of stock carry voting rights. (Points : 1) True False 6. A corporation is a separate legal entity formed under the laws of a particular state. (Points : 1) True False 7. Cash dividends affect only stockholders equity accounts. (Points : 1) True False 8. On June 30, 2014, Stephans Company showed the following data on the equity section of their balance sheet:Stockholders equity Common stock, $1 par100,000 shares authorized$40,000 40,000 shares issued Paid-in capital in excess of par260,000 Retained earnings940,000 Total stockholders equity$1,240,000 On July 1, 2014, Stephans distributed a 5% stock dividend. The market value of the stock at that time was $13 per share. Following this transaction, the total shareholders equity would go down by $26,000. (Points : 1) True False 9. On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet:Stockholders equity Common stock, $1 par100,000 shares authorized$40,000 40,000 shares issued Paid-in capital in excess of par260,000 Retained earnings940,000 Total stockholders equity$1,240,000 On July 1, 2013, Stephans distributed a 5% stock dividend. The market value of the stock at that time was $13 per share. Following this transaction, what would be the new number of shares issued shown on the balance sheet? (Points : 1) 26,00066,00042,000105,000None of these is correct10. If preferred stock is non-cumulative, then the company does NOT need to pay dividends that were passed in previous years. (Points : 1) True False


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