1. In the event of a firms liquidation, the order in which claim holders are paid off is
A. debtholders, common stockholders, preferred stockholders
B. common stockholders, preferred stockholders, debtholders
C. debtholders, preferred stockholders, common stockholders
D. common stockholders, debt holders, preferred stockholders
2. In the month of March the Digby Corporation received and delivered orders of 181,000 units at a price of $15.00 for revenue of $2.715mil for their product Drum. Digby uses the accrual method of accounting and offers 30 day credit terms. By the end of May Digby had collected payments of $2.715mil for the March deliveries. How much of the collected $2.715mil should Digby show on the March 31st income statement and how much on the May 31st income statement?
$0.896mil in March;
$1.819mil in May
$1.357mil in March;
$1.357mil in May
$2.715mil in March;
$0 in May
$0 in March;
$2.715mil in May