6. Mark the following statements as true or false and select the appropriate answer below Stock dividends reduce total stockholders' equity When treasury stock is subsequently resold for more than the acquisition cost, a gain is recorded on the income statement Shares outstanding can never be more than shares issued A. True, False, False B. False, False, False C. True, True, True D. False, True, False E. False, False, True 7. A company's contributed capital on December 31, 2017 is as follows: 6 % Cumulative Preferred Stock 5,000 shares issued and oustanding, $80 par value Common Stock, 15,000 shares, $2 par value Since 2014, there have been no additional shares of stock issued. The company has declared and paid the following dividends in subsequent years as shown in the table below 2014 2015 2016 2017 $20,000 30,000 15,000 40,000 Determine the total amount of the dividends to be allocated to the preferred stockholders in 2017? A. $40,000 B. $24,000 C. $27,000 D. $33,000 E. $31,000 8. Which of the following is an advantage of issuing equity instead of issuing debt as a source of capital?l A. Dividends can be increased in profitable years and reduced when the company is less profitable. B. Issuing stock decreases several important financial ratios, including earnings per share. C. Issuing stock dilutes ownership of the company D. Interest on debt is tax deductible for the issuing company, dividends are not. E. All the above are advantages of issuing equity instead of debt. A corporation declared a 3-for-1 stock split. Before the announcement the corporation had 10,000 shares of $15 par common stock outstanding. The market price of the stock on the date of the declaration was $120 Based on this information, the stock split would 9. A. decrease asssets, decrease liabilities, and increase equity. B. have no effect on assets, liabilities or eauitvi C. not affect assets, decrease liabilities and increase equity D. increase assets, decrease liabilities and increase equity E. increase assets, not affect liabilities and increase equity At the beginning of 2017, a company had 200,000 shares of $5 par value common stock outstanding. On August 1, the company issued another 100,000 shares. The company's 2017 net income was $425,000 In addition, you are given the following portion of the company's 12/31/17 stockholders' equity section of its balance sheet: 10. Preferred stock (4%, $10 par, 60,000 shares issued and outstanding) $600,000 Calculate the company's earnings per share for 2017 (round to the nearest cent) A. $1.34 B. $1.66 C. $1.76 D. $1.42 E. $1.72