Chapter 11 and 12 Practice Solutions - Name ACCT 1201...

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Name: ________________________________________ ACCT 1201 Chapter 11 & 12 Practice Multiple Choice (2 points each) 1. Assume that Fried and Fabulous sells a fryer (a piece of equipment) that originally cost $12,000 and has accumulated depreciation of $7,500 for $6,000 cash. Which of the following will be the impact of this transaction on the statement of cash flows? a. Increase in operating of $4,500 b. Increase in investing of $4,500 c. Increase in operating of $6,000 and decrease in investing of $1,500 d. Decrease in operating of $1,500 and increase in investing of $6,000 e. None of the above 2. Assume that “The Crepes of Wrath” (“TCOW”), a publicly-traded restaurant specializing in crepes (fancy thin French pancakes), has a charter that authorizes them to sell 850,000 shares. TCOW issued 540,000 shares in their IPO (initial public offering) on 1/1/16 and has subsequently purchased back 45,000 shares to hold as treasury stock. How many shares of TCOW stock are outstanding? 3. Collin DeShotz, Matt S. Faction, and Wernher von Bombed all own a publicly-traded roller derby equipment company. In 2016 they declare a cash dividend of $75,000. At that time, they have 1,500 shares of 7% $100 par preferred stock issued and outstanding, and 12,000 shares of common stock issued and outstanding. How much of the dividend will be paid to preferred vs. common shareholders if they have 1 year of dividend in arrears and have cumulative dividend preference?
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