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  1. business
  2. accounting
  3. jackson corporation had the following net income i

Jackson Corporation had the following net income in years 1-3: Year 1 = $10,000 Year...

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Question

Accounting

  1. Jackson Corporation had the following net income in years 1-3:

    Year 1 = $10,000

    Year 2 = $25,000

    Year 3 = $65,000

    There are 100,000 shares of 6%, $5 par value preferred stock and 50,000 shares of

    $2 par value common stockholders. Jackson decides to pay out all their net income in

    dividends. How much in dividends is paid to preferred stockholders in year 1 assuming the preferred stock is cumulative?

    a.

    $30,000
    b.

    $20,000
    c.

    $10,000
    d.

    $40,000

2 points

QUESTION 25

  1. Referring to the previous question, how much in dividends would be paid to preferred stockholders in year 2?

    a.

    $30,000
    b.

    $25,000
    c.

    $55,000
    d.

    $35,000

2 points

QUESTION 26

  1. What are the two classes of stock?

    a.

    Common and special
    b.

    Yours and mine
    c.

    Cumulative and non-cumulative
    d.

    Common and preferred

3 points

QUESTION 27

  1. There are 20,000 shares of $5 par value common stock before a 2 for 1 split. How many shares of common stock are there after the split and what is the par value per share?

    a.

    40,000 shares at $5 per share
    b.

    40,000 shares at $2.50 per share
    c.

    10,000 shares at $2.50 per share
    d.

    10,000 shares at $5 per share

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