DEPARTMENT OF MANAGEMENT SCIENCES

Class/Semester: BBA 7th & 8th Mid Term Exam: Spring 2021
Course Code: AFS-001 Total Marks: 20 Time: 60 minutes
Course Title: Financial Statement Analysis Uploading Time: 30 minutes

Q.No.1 Rosewell Company has had 5,000 shares of 9%, $100 par-value preferred stock and 10,000
shares of $10 par-value common stock outstanding for the last two years. During the most recent
year, dividends paid totaled $(Your Roll number); in the prior year, dividends paid totaled $40,000.

Required: Compute the amount of dividends that must have been paid to preferred stockholders and
common stockholders in each year, given the following independent assumptions: 15
a. Preferred stock is fully participating and cumulative. (4 Marks)
b. Preferred stock is nonparticipating and noncumulative. (3 Marks)
c. Preferred stock participates up to 10% of its par value and is cumulative. (5 Marks)
d. Preferred stock is nonparticipating and cumulative. (3 Marks)

Q.No.2 Recall the unusual or infrequent item that you studied in class and answer the followings: 5
a. Give three examples of unusual or infrequent items that are disclosed separately. (2 Mark)
b. Why are they shown separately? (1 Mark)
c. Are they presented before or after tax? (1 Mark)
d. Why or why not? (1 Mark)

Best of Luck