What the maximum cash dividend the corporation can declare

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Problem 1: ABC Corporation has a total shareholders' equity of P1,000,000, including retained earnings of P210,000. The cash balance is P370,000. The maximum cash dividend the corporation can declare and pay is

a. P370,000

b. P210,000

c. P1,000,000

d. P630,000

Problem 2: Which of the following statements is correct?

a. Like a limited partnership, corporations have limited liability.

b. All dividends, when declared, are liabilities of a corporation.

c. Like the general partners' right in the dissolution of partnership assets, preference shareholders have the first right to participate in the distribution of corporate assets upon dissolution.

d. The corporation uses books of accounts to record all business transactions.

Reference no: EM132804013

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