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Rush Consulting, Inc. (Rush) is a New York corporation that was formed in January 2015....

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Accounting

Rush Consulting, Inc. (Rush) is a New York corporation that was formed in January 2015. The Rush certificate of incorporation authorizes the issuance of 10,000,000 shares of $.01 par value common stock, 1,000,000 shares of cumulative $5 nopar preferred stock, and 2,000,000 shares of $100 par value 10% noncumulative preferred stock. The Rush certificate of incorporation provides for preemptive rights for common stockholders. It is now June 2019, and Rush has the following shareholders: Geddy owns 3 million shares, Alex owns 2 million shares and Neil owns 1 million shares. There are no other shareholders. Rush also has 500,000 shares of treasury stock.

It is now January 2020, and all of the shares of the common stock are issued and outstanding. No preferred stock has been issued and there are no treasury shares. The corporation has $15 million legally available in surplus for dividends. Assuming no insolvency issues, Rush may issue a 10% stock dividend. True or False? explain

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