1.) Out of Africa, a multi-national corporation had a very successful year. The Board of Directors declared and paid a cash dividend of $50,000. The prior year, Out of Africa did not pay dividends on its 400 shares of cumulative, 8% $100 par, preferred stock. How much of the cash dividend was paid to the Common shareholders?

A.) $49992

B.) $46800

C.) $43600

D.) $50000

2.) On December 29, Perch X, inc. purchaes $2000 of merchandise from a supplier. The shipping terms were FOB shipping point. The merchandise did not arrive after yearend. Perch X should__________________.

A.) exclude the merchandise from its inventory but should record the related accounts payable as of yearend.

B.) expense ther merchandise as cost of goods sold at yearend.

C.) include the merchandise in its inventory and record the related accounts payable.

D.) exclude the merchandise from its inventory and the related accounts payable as of yearend.

3.) B Row Inc need some long term financing and arranged for a 10 year, $100000, 7% mortgage loan on January 1, 2010. Annual payments of $14238 will be made on December 31 each year. What effect will the payments have on the accounting equation?

A.) Only total assets and total liabilities will decrease

B.) Only total assets and total shareholder's equity will decrease.

C.) Total assets, liabilities and shareholders equity will all decrease.

D.) Total liabilies will increase and total shareholders equity will decrease.