Happy Friday, Everyone! Its time for the Wiley CPAexcel Weekly Review. The first person to answer all of these questions first and correctly wins a 10$ Starbucks gift card. Good luck! REG Question 1: To which of the following rights is a holder of a public corporations cumulative preferred stock always entitled? A. Conversion of the preferred stock into common stock. B. Voting rights. C. Dividend carryovers from years in which dividends were not paid, to future years. D. Guaranteed dividends. Question 2: Ed, Fred, and Ned form the EFN general partnership. Ed and Fred each contribute $50,000 to start the business. Ned contributes $25,000. Ed and Fred both work 20 hours a week for the business, while Ned works 40 hours a week. After capital contributions are repaid, the firm starts turning a profit. The partners had not expressly agreed how those profits should be shared. Which of the following is true? A. The profits should be shared equally. B. Ed and Fred should receive more of the profits than Ned, because they put more capital into the partnership. C. Ned should receive a greater share of the profits than Ed and Fred, because he is contributing more labor to the business. D. None of the above. Question 3: The partnership agreement for Owen Associates, a general partnership, provides that profits be paid to the partners in the ratio of their financial contribution to the partnership. Moore contributes $10,000, Noon contributes $30,000, and Kale contributes $50,000. For the year ended December 31, 2005, Owen has losses of $180,000. What amount of the losses should be allocated to Kale? A. $40,000 B. $60,000 C. $90,000 D. $100,000 Question 4: Price owns 2,000 shares of Universal Corp.s $10 cumulative preferred stock. During its first year of operations, cash dividends of $5 per share are declared on the preferred stock, but were never paid. In the second year, dividends on the preferred stock were neither declared, nor paid. If Universal is dissolved, which of the following statements is correct? A. Universal will be liable to Price as an unsecured creditor for $10,000. B. Universal will be liable to Price as a secured creditor for $20,000. C. Price will have priority over the claims of Universals bond owners. D. Price will have priority over the claims of Universals unsecured judgment creditors. Question 5: Carr Corp. declares a 7% stock dividend on its common stock. The dividend: A. Must be registered with the SEC pursuant to the Securities Act of 1933. B. Is includable in the gross income of the recipient taxpayers in the year of receipt. C. Has no effect on Carrs earnings and profits for federal income-tax purposes. D. Requires a vote of Carrs stockholders.
Posted on: Fri, 06 Jun 2014 18:32:18 +0000
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