At the Beginning of 2016, Emily Corporation Issued 10,000 Shares

question 165

Multiple Choice

At the beginning of 2016, Emily Corporation issued 10,000 shares of $100 par, 5%, cumulative, preferred stock for $110 per share. No dividends have been paid to preferred or common shareholders. What amount of dividends will a preferred shareholder owning 100 shares receive in 2018 if Emily pays $1,000,000 in dividends?

• A) $500.
• B) $1,500.
• C) $1,650.
• D) $10,000.

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Definitions:

Account Title

The name given to an account that reflects the type of transaction it represents, used in accounting to classify and record financial transactions.

Retained Earnings Statement

A financial statement that summarizes the amounts retained or reinvested in the company from net income (or profit) after dividends are paid.

Stockholders' Investments

Funds or resources that shareholders commit to a company in exchange for equity ownership, contributing to the firm's capital base.

Beginning Balance

The amount of funds in an account at the start of a new financial period, carried over from the end of the previous period.