90.2K

Verified Solution

Link Copied!

11. EyeCare Corporation issued 10,000 shares of 7%, $100 par value preferred stock at the beginning of Year 1. The company did not pay dividends in Year 1. However, preferred stockholders received dividends for Year 1 and Year 2, when the company declared dividends in Year 2. Preferred stockholders also have the option, under specified conditions, to return their shares for a predetermined price. Which of the following features are in present the preferred stock issued by EyeCare?

Select all answers that apply to this question.

Convertible

redeemable

cumulative

Noncumulative

12. Preferred stock is preferred to common stock two ways: (1) preferred stockholders have first rights to dividends, and (2) in the event the company is dissolved, preferred stockholders receive preference over common stockholders in the distribution of assets.

True

False

13. Innovative Media issues 1,000 shares of 8%, $50 par value preferred stock for $60 per share. Which of the following will be recorded at the time of the issue?

a credit to additional paid-in capital for $10,000

a debit to cash for $50,000

a credit to preferred stock for $10,000

a creaser to preferred tock for $60,000

14. On January 1, Year 3, Boxwood, Inc. issues 1,000 shares of $1 par value common stock for $30 per share. Later that year, the company issues 1,000 shares of $10 par value preferred stock for $80 per share. The companys balance sheet as of December 31, Year 3, will show total paid-in capital of:

$11,000

$30,000

$99,000

$110,000

Answer & Explanation Solved by verified expert

See Answer