51 Use the information above to answer the following question What was the amount of Retained Earnings reported in the balance sheet on December 31, 2010 A $184,000 B $2,000 C $71,000 D $51,500 52 A company issues 100,000 shares of preferred stock for $40 per share The stock has a fixed dividend rate of 5 and a par value of $3 per share The company records the issuance with a debit to Cash for A $4 million and a credit to Preferred Stock for $4 million B $300,000 and a credit to Preferred Stock for $300,000 C $4 million, a credit to Preferred Stock for $300,000, and a credit to Additional Paid in Capital for $3 7 million D $300,000, a debit for $3 7 million to Long term Investments, a credit to Preferred Stock for $300,000, and a credit to Additional Paid in Capital for $3 7 million 53 Which of the following statements about dividends in arrears is correct A Dividends in arrears do not appear on the balance sheet or require a journal entry B Dividends in arrears are not disclosed to stockholders C Dividends in arrears applies to common stock D Dividends in arrears are legal liabilities A company has the following paid in capital Preferred stock, 6 , $5 par value, 100,000 shares authorized, 20,000 shares issued and outstanding $500,000 Common stock, $9 par value, 300,000 shares authorized, 110,000 shares issued and outstanding $990,000 54 Use the information above to answer the following question If the company pays a $35,000 dividend, and the preferred stock is cumulative and two years' dividends are in arrears, what is the amount the common stockholders will receive A $17,000 B $23,000 C $29,000 D $35,000 55 The Enterprise Co has the following information available from its accounting records Shares outstanding throughout the year 12,000 Net income for current year $56,000 Stockholders equity at beginning of year $115,000 Stockholders equity at end of year $140,000 The company has no preferred stock What is the return on equity A 40 B 44 C 49 D 467

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51. Use the information above to answer the following question. What was the amount of Retained Earnings reported in the balance sheet on December 31,

51.

Use the information above to answer the following question. What was the amount of Retained Earnings reported in the balance sheet on December 31, 2010?

$184,000

$2,000

$71,000

$51,500

52.

A company issues 100,000 shares of preferred stock for $40 per share. The stock has a fixed dividend rate of 5% and a par value of $3 per share. The company records the issuance with a debit to Cash for:

A.	$4 million and a credit to Preferred Stock for $4 million.

B.	$300,000 and a credit to Preferred Stock for $300,000.

C.	$4 million, a credit to Preferred Stock for $300,000, and a credit to Additional Paid-in Capital for $3.7 million.

D.	$300,000, a debit for $3.7 million to Long-term Investments, a credit to Preferred Stock for $300,000, and a credit to Additional Paid-in Capital for $3.7 million.

53.

Which of the following statements about dividends in arrears is correct?

A.	Dividends in arrears do not appear on the balance sheet or require a journal entry.

B.	Dividends in arrears are not disclosed to stockholders.

C.	Dividends in arrears applies to common stock.

D.	Dividends in arrears are legal liabilities.

A company has the following paid-in capital:

Preferred stock, 6%, $5 par value, 100,000 shares authorized, 20,000 shares issued and outstanding	$500,000
Common stock, $9 par value, 300,000 shares authorized, 110,000 shares issued and outstanding	$990,000

54.

Use the information above to answer the following question. If the company pays a $35,000 dividend, and the preferred stock is cumulative and two years' dividends are in arrears, what is the amount the common stockholders will receive?

$17,000

$23,000

$29,000

$35,000

55.

The Enterprise Co. has the following information available from its accounting records:

Shares outstanding throughout the year	12,000
Net income for current year	$56,000
Stockholders equity at beginning of year	$115,000
Stockholders equity at end of year	$140,000