31) The Stansbury Company has issued 10%, partially participating, cumulative preferred stock with a total par value of $200,000 and common stock with a total par value of $800,000. The preferred stock participates up to 15% of its par value. No dividends are in arrears. How much cash will be paid to the preferred stockholders and the common stockholders, respectively, if cash dividends of $160,000 are distributed?

$20,000 to preferred and $140,000 to common

$32,000 to preferred and $128,000 to common

$50,000 to preferred and $110,000 to common

$30,000 to preferred and $130,000 to common

32) How will a company's total current liabilities and total stockholders' equity be affected by the declaration of a stock dividend? (Assume the stock dividend is distributed at a later date.)

	Total	Total
	Current Liabilities	Stockholders' Equity
I.	increase	decrease
II.	increase	no effect
III.	no effect	decrease
IV.	no effect	no effect

II

I

IV

III

33) The Michael Company's stockholders' equity accounts have the following balances as of December 31, 2016:

Common stock, $20 par (25,000 shares issued of which
2,000 are being held as treasury stock)		$ 500,000
Additional paid-in capital		750,000
Retained earnings		2,250,000
		$3,500,000
Less: Treasury stock (2,000 shares at cost)		(120,000)
	Total stockholders' equity	$3,380,000

On January 2, 2017, the board of directors of Michael declared a 10% stock dividend to be distributed on February 15, 2017. The market price of Michael Company's common stock was $75 per share on January 2, 2017. On the date of declaration, the retained earnings account should be decreased by

zero; only a memorandum entry is required.

$172,500.

$187,500.

$50,000.