On December 31, 2011 and 2012, Taft Corporation had 100,000 of noncumulative and nonconvertible preferred stock issued and outstanding. Additional information 19. shares of common stock and 50,000 shanes Stockholders' equity at 12/31/2012 Net income year ended 12/31/2012 Dividends on preferred stock year ended 12/31/2012 Market price per share of common stock at 12/31/2012 34, 500,000 1, 200,000 300,000 144 The price-earnings ratio on common stock at December 31, 2012, was a. 16 to 1. b. 14 to 1. c. 10 to1 d. 12 to 1. 20. A general principle of disclosure is that material related-party transactions should be disclosed. As the auditor of the Clarence Company, you have noted the following transactions entered into by Clarence during the past fiscal year L. II. . Clarence borrowed $1,000,000 from the Southwest Bank issuing a note. Clarence borrowed $2,000,000 from BH Savings at a rate significantly above the market rate prevailing at that time for such a borrowing Clarence borrowed $500,000 from First Bank with no scheduled terms for how or when funds will be repaid. Assuming all of the above transactions are material, which transaction or transactions above most likely would be a related party transaction requiring disclosure in Clarensce's financial statements? a. Only III above. b. Both II and IIl above. e. Only I above. d. Both I and IlI above. 21. Seahawk Company's adjusted trial balance at December 31, 2012, includes the following account balances: $300,000 400,000 25,000 Treasury Stock, at cost Net Unrealized Holding Loas on Available-For-Sale 10,000 Retained Earnings--Appropriated for Uninsured Earthquake 75,000 100,000 Losses Retained Earnings--Unappropriated What amount should Seahawk report as total owner' equity in its December 31, 2012, balance sheet? a. $840,000 b $860,000 c $890,000 d. $910,000