d. Retained Earnings
Dividends Payable
17. Allstate, Inc., has 10,000 shares of 6 %, $ 100 par value, cumulative preferred stock and 100,000 shares of $ 1 par value common stock outstanding at December 31, 2007. If the board of directors declares a $ 50,000 dividend, the
a. preferred stockholders will receive 1 / 10th of what the common stockholders will receive.
b. preferred stockholders will receive the entire $ 50,000.
c. $ 50,000 will be held as restricted retained earnings and paid out at some future date.
d. preferred stockholders will receive $ 25,000 and the common stockholders will receive $ 25,000.
18. When a change in accounting principle occurs
a. prior years ' financial statements should not be changed to reflect the newly adopted principle.