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.

26.The following information is available for XYZ Corporation:

Shareholders' Equity

Share Capital

Preferred Shares, unlimited number of shares authorized,

5,000, $2.50 convertible, noncumulative shares issued $ 250,000

Common Shares, unlimited number

of shares authorized, 500,000 shares issued1,000,000

Each preferred share is convertible into four common shares. During the year, 2,000 preferred shares were converted into common shares. The journal entry to record the conversion would be:

a.Preferred Shares ..............................................................................100,000

Common Shares ......................................................................100,000

b.Preferred Shares ..............................................................................4,000

Common Shares ......................................................................4,000

c.Preferred Shares ..............................................................................400,000

Common Shares ......................................................................400,000

d. Common Shares............................................................................... 100,000

Preferred Shares......................................................................100,000

e. Preferred Shares..............................................................................16,000

Common Shares......................................................................16,000

27.Square Deal Inc. (a public company) was organized in 2020 to manufacture car stereos. The corporation was authorized to issue an unlimited number of common shares. On March 1, 2020, the corporation issued 500 common shares to the firm's lawyers for helping to organize the corporation. The fair market value of the legal fees was $12,500. The entry to record the issue of the 500 shares, which have a market value of $20 per share, would require a:

a.Credit to Common Shares for $12,500.

b.Debit to Organization Costs for $10,000.

c.Credit to Common Shares for $10,000.

d.Debit to Common Shares for $12,500.

28. Heinfell Inc. reported sales of $850,000, cost of goods sold of $510,000, and otherexpenses of $180,000. Assuming Heinfell reported a profit of $ 100,000 for the year, which of the following entries reflects Heinfell's income tax expense for the year (assuming no other income statement items)?

a. Debit to Income Tax Payable and Credit to Income Tax Expense for $ 60,000

b. Debit to Income Tax Expense and Credit to Income Tax Payable for $ 100,000

c. Debit to Income Tax Expense and Credit to Income Tax Payable for $ 60,000

d. Debit to Income Tax Payable and Credit to Income Tax Expense for $ 100,000

29. Norton Corporation has the following shareholders' equity at year end September 30, 2020:

Shareholders' Equity

Share Capital

$ 10 Preferred Shares, cumulative

10,000 shares authorized, 5,000 shares issued$ 5,000,000

Common Shares,

200,000 shares authorized, 10,000 shares issued200,000

Total Share Capital5,200,000

Retained Earnings570,000

Total Shareholders' Equity$ 5,770,000

On September 15, 2020, Norton Corporation declared a $ 170,000 cash dividend to be paid on October 15 to shareholders of record on September 28. Assuming that the preferred dividends have NOT been paid for fiscal years 2018 and 2019, the total amount of the dividends paid to the preferred shareholders on October 15, 2020 would be:

a) $50,000

b) $0

c) $170,000

d) $150,000

30. Tantramar Corporation has the following shareholders equity on July 31, 2020:

Shareholders' Equity

Share Capital

$ 10 Preferred Shares, cumulative

10,000 shares authorized, 5,000 shares issued$ 2,000,000

Common Shares,

600,000 shares authorized, 10,000 shares issued300,000

Total Share Capital2,300,000

Retained Earnings500,000

Total Shareholders' Equity$ 2,800,000

Assume that during the following fiscal year the company had a profit of $ 65,000 and declared and paid cash dividends of $15,000. The ending balance of retained earnings on July 31, 2021 would be:

a) $500,000

b) $565,000

c) $550,000

d) cannot be determined from the information provided.