The Following Information Is Provided for Bold Company for the Year

question 67

Multiple Choice

The following information is provided for Bold Company for the year 2019: • Preferred stock,6%,$50 par value,1,000 shares issued and outstanding
• Common stock,$100 par value,2,000 shares issued and outstanding
• Dividends in arrears for three prior years (2016-2018)
• Total dividends declared and paid in 2019 were $50,000.
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Assuming the preferred stock is cumulative,what amount of the 2019 dividend declaration for dividends in arrears was recorded with a debit to the Dividends payable account on the date of declaration?

• A)$12,000.
• B)$3,000.
• C)$0.
• D)$50,000.

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Definitions:

Efficiency

Optimal allocation of resources to ensure the best possible outcome or utility with minimal waste or inefficiency.

Efficiently Allocated

The optimal distribution of resources among different possibilities to maximize productivity and utility.

Least Cost

The principle of choosing the option that provides the necessary level of benefit or utility at the minimum possible cost.

Production

The process of combining various material inputs and immaterial inputs (plans, know-how) to make something for consumption.