Use the Following Information for Questions 74-76

question 51

Multiple Choice

Use the following information for questions 74-76.
Instanbul Corp. has outstanding 20,000 no par value, $ 0.80, preferred shares and 100,000 no par value common shares. Dividends have been paid every year except last year and the current year. The carrying value of the preferred shares is $ 200,000 and of the common shares is $ 300,000.
-If the preferred shares are cumulative and non-participating and $ 100,000 is distributed as a dividend, the common shareholders will receive

• A) $ 0.
• B) $ 68,000.
• C) $ 84,000.
• D) $ 100,000.

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Definitions:

Indirect Method

A technique used in cash flow statement preparation that adjusts net income for changes in non-cash working capital and non-operating items to determine cash flow from operating activities.

Operating Activities

Tasks and transactions related to the core business functions of a company, such as selling products and providing services, integral to generating revenue.

Direct Method

A costing method that directly allocates service department costs to producing departments without any intermediate allocation steps.

Operating Activities

Refers to the primary revenue-generating activities of a business, typically including sales, service delivery, and associated costs.