ACC 304 All Assignments ACC 304 All Assignments | Page 50

a. limits the amount of cumulative dividends to the par value of the
preferred stock.
b. requires that dividends not paid in any year must be made up in a
later year before dividends are distributed to common shareholders.
c. means that the shareholder can accumulate preferred stock until it
is equal to the par value of common stock at which time it can be
converted into common stock.
d. enables a preferred stockholder to accumulate dividends until they
equal the par value of the stock and receive the stock in place of the
cash dividends.
P45.
According to the FASB, redeemable preferred stock should be
a. included with common stock.
b. included as a liability.
c. excluded from the stockholders’ equity heading.