A Corporation Has 10,000 Shares of 10%, $50 Par Noncumulative

question 87

Multiple Choice

A corporation has 10,000 shares of 10%, $50 par noncumulative preferred stock outstanding and 20,000 shares of no-par common stock outstanding. At the end of the current year, the corporation declares a dividend of $120,000.
How is the dividend allocated between preferred and common stockholders?

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

Identify the types of contracts subject to the Statute of Frauds.

Understand the exceptions to the Statute of Frauds that allow for oral contracts to be enforceable.

Recognize the role of the Uniform Commercial Code (UCC) in determining the writing requirements for sales contracts.

Recognize the significance of a party's signature in constituting an enforceable contract under the Statute of Frauds.

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Definitions:

Comparative Advantage

The proficiency of an individual or collective in performing a certain economic function more efficiently than a different function.

Specialization

The process of focusing resources on the production of one or a few goods and services to increase efficiency.

Exchange

The process of exchanging one item for another, particularly one of similar type or value.

Production Possibilities

The various combinations of goods and services that can be produced within an economy given the available resources and technology.