Reference no: EM132843465

Problem 1: A corporation purchases 24000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?

Option 1: Decrease by $480000.

Option 2: Decrease by $840000.

Option 3: Increase by $480000.

Option 4: Increase by $840000.

Problem 2: Nash's Trading Post, LLC has 5000 shares of 5%, $100 par value, non-cumulative preferred stock and 20000 shares of $1 par value common stock outstanding at December 31, 2017. There were no dividends declared in 2016. The board of directors declares and pays a $60000 dividend in 2017. What is the amount of dividends received by the common stockholders in 2017?

Option 1: $60000.

Option 2: $35000.

Option 3: $0.

Option 4: $25000.