21. Bowes Corporation has issued 3,000, $7 cumulative preferred shares and 10,000 common shares. Dividends have not been paid on the preferred shares for the current and one prior year. Bowes has recently prospered, and the board of directors has voted to pay out $49,000 from retained earnings in dividends. Once the $49,000 is paid out, how much would the preferred and common shareholders receive per share?

a. $14.00 per share preferred, $0.70 per share common.

b. $7.00 per share preferred, $2.80 per share common.

c. $14.00 per share preferred, $7.00 per share common.

d. $7.00 per share preferred, $0.70 per share common.

e. $14.00 per share preferred, $0 per share common.

22. Sassy Corporation has issued 3,000, $7 noncumulative preferred shares and 10,000 common shares. Dividends have not been paid on the preferred shares for the current and one prior year. Sassy has recently prospered, and the board of directors has voted to pay out $49,000 from retained earnings in dividends. Once the $49,000 is paid out, how much would the preferred and common shareholders receive per share?

a. $14.00 per share preferred, $0 per share common.

b. $0 per share preferred, $4.90 per share common.

c. $7.00 per share preferred, $2.80 per share common.

d. $14.00 per share preferred, $0.70 per share common.

e. $12.25 per share preferred, $0.23 per share common.

23. Dividends on cumulative preferred shares that were not declared in a past period and must be paid before any current period dividends on the preferred shares and before any dividends on common shares are called:

a. Special dividends.

b. Premium dividends.

c. Preemptive dividends.

d. Dividends in arrears.

e. Accrued dividends.

24. Preferred shares that give the issuing company the right (at its option) to purchase the shares from shareholders at specified future dates and prices are called:

a. Convertible preferred shares.

b. Redeemable preferred shares.

c. Premium preferred shares.

d. Cumulative preferred shares.

e. Retractable preferred shares.

25. Preferred shares that are entitled to the current year dividend, but not to any unpaid amounts from previous years are called:

a. Participating preferred shares.

b. Callable preferred shares.

c. Cumulative preferred shares.

d. Convertible preferred shares.

e. Noncumulative preferred shares.