Resco Corporation Has Had 10,000 Shares of $3,cumulative Preferred Shares

question 137

Multiple Choice

Resco Corporation has had 10,000 shares of $3,cumulative preferred shares outstanding as well as 35,000 common shares since it was incorporated.During the first,second,and third years of operations,$10,000,$20,000 and $80,000 in dividends,respectively,were paid.The dividends paid to the common shareholders in year three amounted to:

• A) $30,000
• B) $0
• C) $20,000
• D) $18,000

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Definitions:

Salaries

Regular payments made to employees for their labor or services, typically expressed as annual amounts but paid in smaller increments such as monthly or biweekly.

Variable Cost

Expenses that change in proportion to the level of production or sales in a company.

Fixed Cost

A cost that does not change with an increase or decrease in the amount of goods or services produced or sold.

Marginal Cost

The financial increase incurred by adding one more unit to the production of a product or service.