A Company Has 10 000 Non- Cumulative Preference Shares Outstanding

question 10

Multiple Choice

A company has 10 000 non- cumulative preference shares outstanding and 20 000 ordinary shares outstanding. The preference shares pay an annual dividend of $5 per share. At the end of the current year, the company declares a dividend of $120 000. How is the dividend allocated between preference and ordinary shareholders?

• A)The dividend is allocated $12 000 to preference shareholders and $108 000 to ordinary shareholders.
• B)The dividend is allocated $60 000 to preference shareholders and $60 000 to ordinary shareholders.
• C)The dividend is allocated $50 000 to preference shareholders and $70 000 to ordinary shareholders.
• D)The dividend is allocated $5 000 to preference shareholders and $115 000 to ordinary shareholders.

Understand the concept of variances in managerial accounting, including materials price variance and materials quantity variance.

Analyze the impact of purchasing and production departments on variances.

Discuss the ethical considerations in setting standard costs and handling variances.

Distinguish between different types of standards (ideal versus normal) in cost accounting.

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Definitions:

Consumer Protection

Laws and regulations designed to ensure the rights of consumers as well as fair trade, competition, and accurate information in the marketplace.

Legal Fight

A dispute handled and resolved within a judicial or legal system.

Whistle-blowing

The act of exposing misconduct, unethical practices, or violations of laws within an organization by an insider.

Expense Reports

Documentation and statements that detail spending during a specific period, usually for the purpose of accounting and reimbursement.