On December 31, 2011 and 2012, Taft Corporation had 100,000 shares of of noncumulative and nonconvertible preferred stock issued and outstanding. 19. common stock and 50,000 shares Additional information 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 $4,500,000 1,200,000 300,000 144 /2012 The price-earnings ratio on common stock at December 31, 2012, was a. 16 to 1. b. 14 to 1 c. 10 to 1 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: I. II. III. Clarence borrowed $1,000,000 from the Southwest Bank issuing a noninterest-bearing 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 Clarence's financial statements? a. Only III above. b. Both II and III above. c. Only I above. d. Both 1 and III above. Seahawk Company's adjusted trial balance at December 31, 2012, includes the following account balances: Common Stock, $3 par .. Net Unrealized Holding Loss on Available-For-Sale Retained Earnings--Appropriated for Uninsured Earthquake 21. $300, 000 400,000 25,000 10,000 Securities 75,000 100,000 Losses . . ._... What amount should Seahawk report as total owners' equity in its December 31, 2012, balance sheet? a. $840.000 b. $860,000 c. $890,000 d. $910,000