Question

dividends in arrears are considered in the calculation for book value per share of preferred stock. true false question 8 (3 points) to calculate book value per share of preferred stock, the following is calculated: redemption value and common stock par value. redemption value and dividends in arrears. common stock redemption value. total stockholders equity. question 9 (3 points) the journal entry to pay a cash dividend is to: debit retained earnings; credit dividends payable. debit dividends payable; credit cash. debit retained earnings; credit cash. debit dividends payable; credit retained earnings. question 10 (3 points) a bonds discount is amortized over the term of the bond. true

Explanation:

• First Question: Dividends in arrears are indeed considered in the calculation of the book value per share of preferred stock. This is because preferred stockholders have a claim to these accumulated dividends.
• Question 8: The formula for the book value per share of preferred stock is \((\text{Redemption value}+\text{Dividends in arrears})/\text{Number of preferred shares}\). So, redemption value and dividends in arrears are used.
• Question 9: When paying a cash dividend, first, we record the declaration (debit Retained Earnings; credit Dividends Payable). When paying, we debit Dividends Payable (to reduce the liability) and credit Cash (to record the cash outflow).
• Question 10: A bond's discount (the amount by which the bond's face value exceeds its issue price) is amortized over the bond's term. This is done to adjust the interest expense over the life of the bond.

Answer:

• First Question: True
• Question 8: redemption value and dividends in arrears
• Question 9: debit Dividends Payable; credit Cash
• Question 10: True