1.

Sweet Companys outstanding stock consists of 2,000 shares of cumulative 4% preferred stock with a $100 par value and 12,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.

	Dividend Declared
Year 1	$	4,000
Year 2	$	8,000
Year 3	$	42,000

The total amount of dividends paid to preferred and common shareholders over the three-year period is:

• $24,000 preferred; $30,000 common.

• $16,000 preferred; $38,000 common.

• $8,000 preferred; $46,000 common.

• $20,000 preferred; $34,000 common.

• $16,000 preferred; $38,000 common.

2.

Torino Company has 3,000 shares of $10 par value, 7.5% cumulative and nonparticipating preferred stock and 30,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $2,000 in its first year of operation. The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:

• $250.

• $4,500.

• $2,000.

• $2,250.

• $2,500.

3.

Global Corporation had 49,000 shares of $20 par value common stock outstanding on July 1. Later that day the board of directors declared a 5% stock dividend when the market value of each share was $26. The entry to record the dividend declaration is:

• Debit Retained Earnings $63,700; credit Cash $63,700.

• Debit Retained Earnings $63,700; credit Common Stock Dividend Distributable $63,700.

• Debit Retained Earnings $49,000; credit Common Stock Dividend Distributable $49,000.

• Debit Retained Earnings $63,700; credit Common Stock Dividend Distributable $49,000; credit Paid-In Capital in Excess of Par Value, Common Stock $14,700.

• No entry is made until the stock is issued.

4.

A corporation issued 5,100 shares of $10 par value common stock in exchange for some land with a market value of $72,000. The entry to record this exchange is:

• Debit Land $72,000; credit Common Stock $51,000; credit Paid-In Capital in Excess of Par Value, Common Stock $21,000.

• Debit Land $72,000; credit Common Stock $72,000.

• Debit Land $51,000; credit Common Stock $51,000.

• Debit Common Stock $51,000; debit Paid-In Capital in Excess of Par Value, Common Stock $21,000; credit Land $72,000.

• Debit Common Stock $72,000; credit Land $72,000.

5.

A corporation declared and issued a 15% stock dividend on October 1. The following information was available immediately prior to the dividend:

Retained earnings	$	800,000
Shares issued and outstanding		65,000
Market value per share	$	20
Par value per share	$	5

The amount that contributed capital will increase (decrease) as a result of recording this stock dividend is:

• $(195,000).

• $0.

• $195,000.

• $48,750.

• $(48,750).