1.A company has outstanding 9 million shares of $2 par value common stock and 1 million shares of $4 par value preferred stock. The preferred stock has an 8% dividend rate. The company declares $600,000 in total dividends for the year. Which of the following is correct if dividends in arrears are $30,000?

Preferred stockholders will receive $350,000; common stockholders will receive $250,000.

Preferred stockholders will receive $60,000; common stockholders will receive $540,000.

Preferred stockholders will receive $320,000; common stockholders will receive $280,000.

Preferred stockholders will receive $90,000; common stockholders will receive $510,000.

2.The stockholders' equity section of the balance sheet includes all of the following except:

Retained Earnings.

Contributed Capital.

Treasury Stock.

Dividends.

3.When a company uses the direct method to determine the cash flows from operating activities, cash flows from operating activities will:

be identical to the amount reported using the indirect method.

be larger if there is a net cash inflow and smaller if there is a net cash outflow compared to the amount reported using the indirect method.

always be larger than the amount reported using the indirect method.

be larger if there is a net cash outflow and smaller if there is a net cash inflow compared to the amount reported using the indirect method.

4.Which of the following would be reported on the statement of cash flows, using the direct method, as a cash flow from operating activities?

Payment of income taxes

Payment of cash dividends

Purchase of a building

Purchase of treasury stock

5.Which of the following are used to determine cash flows from financing activities?

Short-term debt, Accrued Liabilities, Common Stock, and Notes Payable

Long-term debt, Common Stock, and Retained Earnings

Short-term debt, Accrued Liabilities, Retained Earnings, and Bonds Payable

Long-term debt, Notes Payable, Interest Expense, and Bonds Payable

6.Which of the following represent cash outflows from financing activities?

Distributing a stock dividend

Paying a bond's face value at maturity

Issuing long-term bonds at a discount

Paying interest on promissory notes