Use the Following Information for Questions 74-76

question 21

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 noncumulative and fully participating and $ 70,000 is distributed as a dividend, the common shareholders will receive

• A) $ 0.
• B) $ 42,000.
• C) $ 46,000.
• D) $ 54,000.

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Definitions:

Credit Policy

The guidelines a company follows to determine the amount and terms of credit to extend to customers.

5 C's of Credit

Refers to the five key elements a lender considers when assessing the creditworthiness of a potential borrower: character, capacity, capital, collateral, and conditions.

Conditions

Specific terms or requirements outlined in an agreement or contract, which must be met for the agreement to be fully enforceable.

Economic Conditions

The state of the economy at a certain time, including factors like inflation, employment rates, and GDP growth.