Which of the following is a source of cash flows? A) increase ...

[newyorker26]

Which of the following is a source of cash flows?
 
  A) increase in marketable securities
  B) increase in accounts payable
  C) decrease in notes payable
  D) repurchase of stock

Question 2

Edward Accounting Services has an outstanding issue of 1,000 shares preferred stock with a 100 par value, an 9 percent annual dividend, and 5,000 shares of common stock outstanding.
 
  If the stock is cumulative and the board of directors has passed the preferred dividend for the last two years, how much must preferred stockholders be paid prior to paying dividends to common stockholders?

[mcomstock09]

Answer to Question 1

B

Answer to Question 2

The amount to be paid to preferred stockholders prior to paying dividends to common stockholders = Cumulative preferred dividends + Current year preferred dividend = 9,000  2 + 9,000 = 27,000