CGI Corporation Had 10,000 Shares of $2 Par Common Stock

question 1

Multiple Choice

CGI Corporation had 10,000 shares of $2 par common stock outstanding; the shares had been issued at $5 per share. At the end of March 2011, CGI declared a $3 cash dividend per share when the market price of the stock was $8 per share. Which of the following statements is most true?

• A)The $3 cash dividend per share is determined by analyzing the difference between the issuance price and the market value of the stock.
• B)The $3 cash dividend per share is determined by analyzing the difference between the issuance price and the par value of the stock.
• C)CGI can process the dividend payment using only the information specified above.
• D)None of the above statements is true.

---

Definitions:

Estimated Liabilities

Obligations that a company expects to settle in the future, the amount and/or timing of which are uncertain.

Unearned Revenues

Money received by a company for goods or services yet to be provided, recognized as a liability until the service or good is delivered.

Payroll Register

A Payroll Register is a document that summarizes all employee earnings, deductions, and net pay during a payroll period, serving as a detailed record of payroll activity.

Prior Year's Earnings

The net income or profit left over from the previous fiscal year after expenses, taxes, and dividends have been deducted.