Flanders Company has outstanding 18 million shares of $2 par value common stock and 2 million shares of $4 par value preferred stock. The preferred stock has an 8% dividend rate. The company declares $1,200,000 in total dividends for the year. Which of the following is correct if dividends in arrears are $60,000?

A.) Preferred stockholders will receive $180,000; common stockholders will receive $1,020,000.

B.) Preferred stockholders will receive $640,000; common stockholders will receive $560,000.

C.) Preferred stockholders will receive $700,000; common stockholders will receive $500,000.

D.) Preferred stockholders will receive $120,000; common stockholders will receive $1,080,000.

2.)

Buffalo Butter Co. had 40,000 shares of $4 par value common stock outstanding on January 1. On January 20, the company purchased 4,000 of its stock for $16 per share. On July 3, the company reissued 2,000 of the shares at $20 per share. Buffalo Butter uses the cost method to account for its treasury stock. What journal entry will record the reissuance on July 3?

Multiple Choice

A.) Debit Cash for $40,000, credit Common Stock for $12,000, and credit Additional Paid-in Capital for $28,000

B.) Debit Cash for $40,000, credit Common Stock for $32,000, and credit Gain on Reissuance of Stock for $8,000

C.) Debit Cash for $40,000, credit Treasury Stock for $32,000, and credit Additional Paid-in Capital for $8,000

D.) Debit Cash and credit Treasury Stock for $40,000

3.)

Net income	$	14,000
Cash dividends paid to stockholders		4,000
Cash proceeds from sale of land		6,000
Cash proceeds from bank loan		10,000
Cash payment (principal) on bank loan		2,000
Cash paid to purchase equipment		8,000

The company would report net cash provided by (used in) investing activities of:

Multiple Choice

A.) $10,000.

B.) $(4,000).

C.) $14,000.

D.) $(2,000).