Question 1. McDowell Corp has an income tax rate of 35%, taxable income of $662,000, and income before income tax of $597,000. Which of the following would be included in the entry to record income tax expense?
a. Prepaid income tax is credited for $231,700
b. Income tax payable is credited for $208,950
c. Income tax expense is debited for $208,950
d. Deferred tax liability is credited for $22,750
Question 2. If a corporation has outstanding 1,000 shares of $9 cumulative preferred stock of $100 par and dividends have not been paid for the preceding three years what is the amount of preferred dividends that must be declared in the current year before a dividend can be declared on common stock?
a. $9,000
b. $27,000
c. $18,000
d. $36,000
Question 3. If a corporation reacquires its own stock, the stock is listed on the balance sheet in the?
a. Current assets section
b. stockholders section
c. stockholders equity section
d. current liabilities section
e. other assets section
Question 4. When a company "passes the dividend", the dividends are said to be:
a. preferred
b. in arrears
c. cumulative
d. declared