QUESTION 22

1. Which one of the following would be considered a contingent liability?
2. A.A company owes $24,000 on inventories purchased on credit.
3. B.A company estimates that it will probably have to pay $30,000 to the EPA for a chemical spill.
4. C.A company has access to a line of credit with a bank in the amount of $46,000.
5. D.A company believes that it is reasonably possible it will lose a lawsuit and damages could be $26,000.
6. E.None of the above

3.3335 points

QUESTION 23

1. Calculate Earnings per share on a company's common stock. If a company has net income of $100,000 and they have an average common stock share balance of 10,000 shares and they paid $5,000 in preferred dividend during the year. The earnings per share is:
2. A.$.90
3. B.$10.50
4. C.$9.50
5. D.$10.00

3.3335 points

QUESTION 24

1. Calculate the annual interest payment that is required on preferred stock. If a company has 20,000 share of $100 par value 6% preferred stock, which it issued at $250 per share. The company pays interest to it shareholders annually. What is the amount they must pay to shareholders each year?
2. A.$20,000
3. B.$100,000
4. C.$300,000
5. D.$120,000

3.3335 points

QUESTION 25

1. Which of the following items would not be found on a balance sheet? (One answer)
2. A.Stockholders' Equity
3. B.Property, plant and equipment
4. C.Bank financing
5. D.Retained Earning
6. E.Cost of Goods Sold