Reference no: EM131216229
1. Ferber Inc. issued 1,000 shares of $100 par, 5%, non-cumulative preferred stock on January 1, Year1. Ferber did not pay dividends in Year1 or Year2. On December 31, Year3 Ferber declares and pays $22,000 of dividends. How much of the dividend will the common shareholders receive?
a. $22,000 b. $15,000 c. $5,000 d. $17,000 e. $12,000
2. Lerner Inc. issued bonds several years ago for more than face value. The bonds had a face value of $100,000 and pay interest annually at 9% on 12/31 each year. The market rate on the date of issue was 8%. Assume the carrying value of the bonds throughout 20X2 is 104,000. Lerner prepares annual financial statements at 12/31 each year. What will be the carrying value of the bond on the 12/31/20X2 balance sheet?
A. $103,640 B. $103,320 C. $100,680 D. $103,000
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