1. As company's inception in Year 1, TUV Company has always had 1,000 shares of $10 par value common stock and 1,000 shares of 10% preferred stock with $100 par value per share. Preferred stock is cumulative. TUV Company declared and paid the following dividends:
Year 2000 Dividend $6,000
Year 2001 Dividend $8,000
Year 2002 Dividend $20,000
Amount of dividends received by common shareholders in Year 3 is:
a. $10,000
b. $2,000
c. $0
d. $4,000
e. $5,000
2. At the end of accounting period, RST Company had following account balances:
Cash......$17,000
Common Stock.......$2,000
Retain earnings.....?
Paid in capital in excess of par.....$8,000
Treasury stock....$1,000
Unearned revenue......$4,000
RST Company had no other accounts with non-zero balances. If RST Company's total stockholders' equity is $15,000, then its paid in retained earnings account balance is:
a. $2,000
b. $4,000
c. $3,000
d. $6,000
e. $5,000
3. Which of the given is a factor is least probable to constrain insurer's ability to increase premium volume?
a. Variability in underwriting experience
b. Amortization of bond premiums and/or discounts
c. Immediate expensing of policy acquisition expenses
d. Variability on investment experience
e. None of the above