As of January 1,2013 There Are 2 Years of Dividends

question 121

Multiple Choice

As of January 1,2013 there are 2 years of dividends in arrears on an issue of cumulative nonconvertible preferred shares.No dividends on preferred shares were declared in 2013.Therefore,under IFRS,on the Dec.31,2013 financial statements,the firm issuing the preferred shares:

• A) Reports a liability equal to 3 years of dividends on preferred shares
• B) Reports a liability equal to 2 years of dividends on preferred shares
• C) Subtracts 2 years of dividends on preferred shares from earnings when computing earnings per share for 2013
• D) Discloses in a footnote to 2013's balance sheet that there are 3 years of dividends on preferred shares in arrears
• E) Discloses in a footnote to 2013's balance sheet that there are 2 years of dividends on preferred shares in arrears

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Definitions:

Optimum Allocation

The process of distributing resources in the most efficient manner to achieve the highest possible returns or outcomes.

Subordinates

Employees or team members who are lower in rank or position and report to a superior.

Porter's Model

A strategic tool developed by Michael Porter used to analyze an industry's structure and competition intensity through five forces: threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products, and competitive rivalry.

Competitive Strategies

Tactics and approaches that businesses adopt to outperform their rivals and achieve superior market position.