20. A company was organized on January 1, 2015. During its first year, the company issed the following stock transactions:

 

                  5% Cumulative Preferred Stock, (900 shares issued; $40 par)                                  

                  Common Stock, $5 par (50,000 shares issued)                                                              

 

 At December 31, the company declared the following cash dividends:

 

                                         2015                                     $ 1,900

                                         2016                                      $ 1,500

                                         2017                                      $ 1,900

                                         2018                                      $ 1,500

 

 

Determine the amount of dividends in arrears at December 31, 2018

A.$200

B.$400

C.$500

D.$700

E.$1,000

 

21. Which of the following statements is false?

A.An advantage of issuing bonds is that interest expense is tax deductible.

B.An advantage of issuing stock is that dividends are not a liability until declared.

C.A disadvantage of issuing stock is the potential to dilute ownership interest.

D.A disadvantage of issuing stock is that dividends are not tax deductible.

E.None of the above transactions are false.

 

Please help with homework. Thank you.

SuperTutor

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Status NEW Posted 11 Jul 2017 08:07 AM My Price 6.00

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