Reference no: EM132604174

Question 1: Scanlon Corporation has estimated its activity for April as follows:

Sales: $900,000

Gross profit (based on sales): 30%

Increase in accounts receivable during month: 15,000

Increase in finished goods inventory during month: 25,000

Total selling and administrative costs: 80,000

Depreciation included in selling and administrative costs: 15,000

Scanlon has no raw material or work in process inventory at the beginning or end of April. On the basis of the above, what are estimated cash disbursements for April?

Question 2: Magic Corporation paid $100,000 in dividends. The corporation had 10,000 shares of common stock outstanding and 5,000 shares of $100 par value 4% preferred stock. The preferred stock was two years in arrears prior to the current year. How much was paid to the common stockholders?