ELULUS 3. D&D Corporation is authorized to sell 50,000 shares of $10 par, 6% cumulative preferred stock and 100,000 shares of $6 par common stock. There are 40,000 shares of preferred stock outstanding and 30,000 shares of common stock outstanding. A $40,000 cash dividend has been declared by the board of directors. No dividends in arrears exist. What is the total amount to be given to the preferred shareholders? A. $40,000 B. $20,000 C. $18,000 D. $24,000 I 4. Refer to Question 3. What is the common stock dividend per share amount (rounded)? A. $.733 B. $.533 C. $.678 D. $1.333 5. Which of the following is not an advantage of a corporation? A. Ease of transferring ownership B. Limited liability of stockholders C. Double taxation of distributed profits D. Can raise more capital than a proprietorship can 6. Authorized stock is which of the following? A. The number of shares the company has issued to its stockholders. B. The number of shares that the stockholders own. C. The maximum number of shares the company can issue. D. The number of shares that will be distributed in a stock dividend. 1. Kalin Corporation issued 100,000 shares of $1 par common stock at a price of $10 per share. On June 1, Kahn purchased 2,000 shares of its own stock at a cost of $14 per share. On December 1, Kahn resold all the shares for $16 each. The entry on December 1 would include which of these? A. Credit to Paid-in Capital from Treasury Stock Transactions, $4,000. B. Credit to Treasury Stock, $32,000. C. Credit to Gain on the Sale of Treasury Stock, $4,000. D. Debit to Cash, $28,000. 2. Queensboro Corp. issued 10,000 shares of $20 par common stock at $18 per share. Later, the company purchased 3,000 of these shares from the shareholders. If Queensboro later declares a 15% stock dividend, they should distribute an additional shares: A. 1,050 B. 1,950 C. 450 D. 1.500 3. Which of the following statements is true regarding stock transactions? A. Dividends in arrears can apply to both common and preferred stock. B. A large stock dividend is recorded at par value. C. The journal entry for a stock split includes a credit to Common Stock. D. The purchase of treasury stock is recorded in a contra-equity account with a credit balance