Mutiple choice

Halverstein Company's outstanding stock consists of 7,000 shares of cumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividends Declared & Paid Year 1 $0 Year 2 $ 6,000 Year 3 $32,000 The amount of dividends paid to preferred and common shareholders in Year 2 is: a) $3,500 preferred; $2,500 common. b) $3,000 preferred; $3,000 common. c) $0 preferred; $6,000 common. d) $4,200 preferred; $1,800 common. e) $6,000 preferred; $0 common. The direct method of reporting operating cash flows: Multiple Choice Subtracts cash payments from cash receipts. Must be used by all companies. Is used by most companies. is considered supplementary disclosure. Is not recommended by the Financial Accounting Standards Board (FASB), but is commonly used