1. Which one of the following is not necessary in order for a corporation to pay a cash dividend?

a. Approval of stockholders

b. Adequate cash

c. Declaration of dividends by the board of directors

d. Retained earnings

2. Which one of the following events would not require a formal journal

entry on a corporation's books?

a. 100% stock dividend

b. 2 for 1 stock split

c. 2% stock dividend

d. $1 per share cash dividend

3. Buick, Inc. has 5,000 shares of 6%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2012, and December 31, 2013. The board of directors declared and paid a $20,000 dividend in 2012. In 2013, $40,000 of dividends are declared and paid. What are the dividends received by the preferred and common shareholders in 2013?

Preferred Common