Problem 8-23 (algo) common and preferred stock—issuances and dividends lo 1, 2[the following information applies to the questions displayed below.]homestead oil corp. was incorporated on january 1, 2019, and issued the following stock for cash: 880,000 shares of no-par common stock were authorized; 150,000 shares were issued on january 1, 2019, at $18.00 per share.300,000 shares of $100 par value, 8.00% cumulative, preferred stock were authorized; 78,000 shares were issued on january 1, 2019, at $130 per share. net income for the years ended december 31, 2019 and 2020 was $1,390,000 and $2,460,000, respectively. no dividends were declared or paid during 2019. however, on december 28, 2020, the board of directors of homestead declared dividends of $1,660,000, payable on february 12, 2021, to holders of record as of january 19, 2021.

Aprice ceiling is “binding” if the price ceiling is set below the equilibrium price. suppose that the equilibrium price is $5. if a price ceiling is set at $6, this will not affect the market in any way since $5 remains a legally allowable price (since $5 < $6). a price ceiling of $6 is called a “non-binding” price ceiling. on the other hand, if the price ceiling is set at $4, the price ceiling is “binding” because the natural equilibrium price is $5 but that is no longer allowed. what happens when there is a binding price ceiling? at a price below the equilibrium price, quantity demanded exceeds quantity supplied. there is a shortage. normally, price increases eliminate shortages by increasing quantity supplied and decreasing quantity demanded. in this case, however, price increases are not allowed past the price ceiling. we therefore predict that the observed market price will be right at the price ceiling and there will be a permanent shortage. the observed quantity bought and sold will be dictated by the quantity supplied at the price ceiling. although consumers would like to buy more, there are no more units for sale

Jen left a job paying $75,000 per year to start her own florist shop in a building she owns. the market value of the building is $120,000. she pays $35,000 per year for flowers and other supplies, and has a bank account that pays 5 percent interest. what is the economic cost of jen's business?

Agovernment receives a gift of cash and investments with a fair value of $200,000. the donor specified that the earnings from the gift must be used to beautify city-owned parks and the principal must be re-invested. the $200,000 gift should be accounted for in which of the following funds? a) general fund b) private-purpose trust fund c) agency fund d) permanent fund