2. A company\'s board of directors votes to declare a cash dividend of $.80 per
ID: 2470425 • Letter: 2
Question
2. A company's board of directors votes to declare a cash dividend of $.80 per share of common stock. The company has 16,000 shares authorized, 11,000 issued, and 10,500 shares outstanding. The total amount of the cash dividend is:
$11,800.
$12,800.
$8,400.
$17,200.
$8,800.
3. The following data has been collected about Keller Company's stockholders' equity accounts:
Assuming the treasury shares were all purchased at the same price, the number of shares of treasury stock is:
43,000.
65,000.
18,000.
10.
3,800.
Torino Company has 1,800 shares of $10 par value, 5.0% cumulative and nonparticipating preferred stock and 18,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $500 in its first year of operation. The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:
$1,800.
$400.
$500.
$1,300.
$900.
Carducci Corporation reported Net sales of $3.54 million and beginning Total assets of $0.96 million and ending Total assets of $1.36 million. The average Total asset amount is:
$0.35 million.
$2.58 million.
$0.27 million.
$2.18 million.
$1.16 million.
3. The following data has been collected about Keller Company's stockholders' equity accounts:
Explanation / Answer
2. $ 8,400
Dividends are declared on shares issued and outstanding. Therefore, the cash dividends = $ 10,500 x 0.80 = $ 8,400
3. The number of shares of treasury stock is 3,800.
Number of shares of treasury = Number of shares issued - Number of shares outstanding = 6,500 - 2,700 = 3,800
4. The correct answer is $ 1,300.
Annual preferred dividends = 1,800 x $ 10 x 5% = $ 900. Since only $ 500 could be paid in the first year by way of dividends, $ 400 gets carried forward next year. Therefore, total dividends to be paid to preferred stockholders = current year's dividends + arrear dividends = $ 900 + $ 400 = $ 1,300.
5. The correct answer is $ 1.16 million.
Average total assets = (Beginning total assets + Ending total assets) / 2 = 0.96 m + 1.36 m / 2 = $ 1.16 million
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