Evergreen Building,Inc

question 61

Multiple Choice

Evergreen Building,Inc.has declared a $40,000 cash dividend to shareholders.The company has 5,000 shares of $20-par,6% preferred stock and 10,000 shares of $15-par common stock.The preferred stock is cumulative.How much will be distributed to the preferred and common stockholders on the date of payment if the preferred stock is $12,000 in arrears?

• A)$40,000 preferred,$0 common
• B)$6,000 preferred,$34,000 common
• C)$18,000 preferred,$22,000 common
• D)$20,000 preferred,$20,000 common

Distinguish between different types of stock within the Stockholders' equity section and their reporting.

Calculate basic earnings per share and understand the effect of preferred dividends.

Recognize the accounting treatment and financial statement presentation of the sale and purchase of treasury stock.

Understand the concept of prior period adjustments and their impact on retained earnings.

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