Question : 81.Most preferred stocks have one or more of the following : 1237452

 

 

81.Most preferred stocks have one or more of the following characteristics, except:   

A. To receive dividends on a preferred basis.

 

B. Cumulative dividends.

 

C. Voting rights.

 

D. Callable at the option of the corporation.

 

 

 

 

82.Which of the following individuals has the most power to influence corporate policy on a long-term basis?   

A. A shareholder owning 60% of the outstanding common stock.

 

B. A shareholder owning 80% of the outstanding preferred stock.

 

C. The treasurer of the corporation.

 

D. The controller of the corporation.

 

 

 

 

83.Which of the following is not a characteristic of most preferred stock?   

A. Dividends that vary as income changes.

 

B. Preference as to dividends.

 

C. Preference as to assets in the event of liquidation of the company.

 

D. No voting power.

 

 

 

 

84.The financial statements of a corporation that failed during the current year to pay any dividends on its cumulative preferred stock should:   

A. Include the amount of the omitted dividends among its current liabilities.

 

B. Include a footnote disclosing the amount of the dividends in arrears.

 

C. Show the amount of the omitted dividends as a deduction from retained earnings.

 

D. List the omitted dividends as a long-term liability.

 

 

 

 

85.If the preferred stock of a corporation is cumulative:   

A. Dividends on preferred stock are guaranteed.

 

B. Dividends cannot be declared in an amount less than that stated on the stock certificate.

 

C. Preferred stockholders participate in dividends paid in excess of a stated amount on the common shares.

 

D. Dividends in arrears must be paid on preferred stock before any dividend can be paid on common stock.

 

 

 

 

86.Mayfair Corporation has outstanding 70,000 shares of $1 par value common stock as well as 20,000 shares of 7%, $100 par value cumulative preferred stock. At the beginning of the year, the balance in retained earnings was $800,000, and one year’s dividends were in arrears. Net income for the current year is $580,000. Compute the balance in retained earnings at the end of the year if Mayfair Corporation pays a dividend of $3 per share on its common stock this year.   

A. $1,080,000.

 

B. $1,670,000.

 

C. $890,000.

 

D. $310,000.

($800,000 + $580,000) – (2($7 × 20,000) + ($3 × 70,000)) = $890,000

 

 

 

Shown below is information relating to the stockholders’ equity of Reeve Corporation as of December 31, 2015: 

 

87.Refer to the information above. How many shares of preferred stock are issued and outstanding?   

A. 75,000 shares.

 

B. 6,000 shares.

 

C. 60,000 shares.

 

D. 120,000 shares.

$600,000/$100 = 6,000 shares

 

 

 

88.Refer to the information above. What was the original issue price per share of common stock?   

A. $10.00 per share.

 

B. $2.40 per share.

 

C. $15.00 per share.

 

D. $8.00 per share.

$10 + ($600,000/120,000) = $15

 

 

 

89.Refer to the information above. What is total paid-in capital?   

A. $2,292,000.

 

B. $1,800,000.

 

C. $2,400,000.

 

D. $2,340,000.

$600,000 + $1,200,000 + $600,000 = $2,400,000

 

 

 

90.Refer to the information above. Total stockholders’ equity is:   

A. $2,400,000.

 

B. $2,460,000.

 

C. $2,340,000.

 

D. $2,292,000.

$600,000 + $1,200,000 + $600,000 – $60,000 = $2,340,000