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Unformatted text preview: dividends for the year in which they are declared and also for previous years that have been missed. Disadvantages of cumulative preferred stock is that these dividends have to be paid before common stock dividends are paid. 3. Our lawyer sent us a bill for $750. When we talked the bill over with her, she said she would be willing to receive common stock in our corporation instead of cash. We would be happy to issue her stock, but were worried about accounting for this transaction. Can we do this? If so, how do we determine how many shares to give her? Giving common stock as a payment is a possibility. The cost of the common stock it is determined by fair market value then just equal the debt amount with common stock....
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- Spring '11