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2. A company\'s board of directors votes to declare a cash dividend of $.80 per

ID: 2470425 • Letter: 2

Question

2. A company's board of directors votes to declare a cash dividend of $.80 per share of common stock. The company has 16,000 shares authorized, 11,000 issued, and 10,500 shares outstanding. The total amount of the cash dividend is:

$11,800.

$12,800.

$8,400.

$17,200.

$8,800.

3. The following data has been collected about Keller Company's stockholders' equity accounts:

  

  

Assuming the treasury shares were all purchased at the same price, the number of shares of treasury stock is:

43,000.

65,000.

18,000.

10.

3,800.

Torino Company has 1,800 shares of $10 par value, 5.0% cumulative and nonparticipating preferred stock and 18,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $500 in its first year of operation. The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:

$1,800.

$400.

$500.

$1,300.

$900.

Carducci Corporation reported Net sales of $3.54 million and beginning Total assets of $0.96 million and ending Total assets of $1.36 million. The average Total asset amount is:

$0.35 million.

$2.58 million.

$0.27 million.

$2.18 million.

$1.16 million.

3. The following data has been collected about Keller Company's stockholders' equity accounts:

Explanation / Answer

2. $ 8,400

Dividends are declared on shares issued and outstanding. Therefore, the cash dividends = $ 10,500 x 0.80 = $ 8,400

3. The number of shares of treasury stock is 3,800.

Number of shares of treasury = Number of shares issued - Number of shares outstanding = 6,500 - 2,700 = 3,800

4. The correct answer is $ 1,300.

Annual preferred dividends = 1,800 x $ 10 x 5% = $ 900. Since only $ 500 could be paid in the first year by way of dividends, $ 400 gets carried forward next year. Therefore, total dividends to be paid to preferred stockholders = current year's dividends + arrear dividends = $ 900 + $ 400 = $ 1,300.

5. The correct answer is $ 1.16 million.

Average total assets = (Beginning total assets + Ending total assets) / 2 = 0.96 m + 1.36 m / 2 = $ 1.16 million