ACCT 200 Exam 2 Study Guide ACCT Review Example Problem XYZ company has authorized 50000 shares of 2 60 par preferred stock XYZ company has 30000 shares outstanding What is the preferred dividend per share 60 x 02 1 2 share the rate is a percentage of the par amount XYZ company declares and pays an 80000 cash dividend What is the total dividend paid to preferred shareholders 30000 outstanding x 1 2 share 36000 What is the amount of dividend paid to the common shareholder 8000 36000 44000 Important Notes directly from professor When looking at doubtful accounts NEVER decrease accounts receivable Allowance for doubtful accounts represents amount of accounts receivable the company does not expect to collect in the future Treasury shares are always recorded at the price paid to reacquire them Depreciation is the using up of FIXED assets Straight line depreciation historical cost residual value x 1 useful life Double declining depreciation historical cost accumulated depreciation x 2 useful life Accumulated depreciation is a contra asset Net book value historical cost accumulated depreciation the amount of asset the company has left to use A company will never pay itself a dividend treasury stocks Corporations repurchase shares of stock to have them available for employee stock programs Review these homework problems most for test 7 14 8 17 EP 2 8 26 most tested question on test
View Full Document
Unlocking...