ACCT 551 - Intermediate Accounting II (DeVry)

1. Question: (TCO E) Stockholders' equity is generally classified into two major categories:
2. Question: (TCO E) A primary source of stockholders' equity is (Points : 4)
3. Question: (TCO E) A "secret reserve" will be created if
4. Question: (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)
5. Question: (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?
6. Question: (TCO F) Anders, Inc., has 5,000 shares of 5%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2011. There were no dividends declared in 2009. The board of directors declares and pays a $45,000 dividend in 2010 and in 2011. What is the amount of dividends received by the common stockholders in 2011?
7. Question: (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 =
A. $76,000. (Points : 4)
8. (TCO F) Written, Inc. has 300,000 outstanding shares of $2 par common stock and 60,000 shares of no-par 8% preferred stock with a stated value of $5. The preferred stock is cumulative and nonparticipating. Dividends have been paid in every year except the past 2 years and the current year.
Assuming that $63,000 will be distributed as a dividend in the current year, how much will the preferred stockholders receive? (Points : 4) 

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    ACCT 551 Week 5 Quiz Solutions

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