Question:

***Please check my answers. Answers are bolded.***

1.) Owners of preferred stock do not have which of the following?

a. Ownership interest in the corporation

b. Priority over common stock as to assets in liquidation

c. Priority over common stock as to voting rights

d. Priority over common stock as to dividends

4.) XXXX Corporation had the following shares of stock outstanding on December 31, 2022:

• Common stock, $50 par value, 200,000 shares outstanding
• Preferred stock, 8%, $100 par value, cumulative, 20,000 shares outstanding
• Dividends were in arrears for 2020 and 2021. On December 31, 2022, total cash dividends of $800,000 were declared.

The total amounts payable to preferred stockholders and common stockholders, respectively, are:

a. $160,000 and $640,000

b. $480,000 and $320,000

c. $320,000 and $480,000

d. $400,000 and $400,000

e. $240,000 and $560,000

5.) The Corace Company issued 2,000 shares of $2 par value stock to pay for legal services provided by Scavone Company. Market Value of the stock was $10 per share. The journal entry will include:

a. A $20,000 debit to Legal Services Expense

b. A $4,000 debit to Legal Services Expense

c. A $20,000 credit to Common Stock

d. A $20,000 credit to Paid-in-Capital in Excess of Par