Question 1

Prepare the following journal entries for Complex Company.
March 15 Declared the stated dividend on 8,000 shares of $12 par, 7% preferred stock.
April 15 Paid the dividend.

Accepted Answer

The answer of Prepare the following journal entries for Complex...

Question 2

A corporation may issue a stock dividend for which of the following reasons?

Accepted Answer

A)  May want to increase permanent capital in the business 
B)  May want to decrease market value 
C)  May be short of cash and unable to pay a cash dividend 
D)  All of the above are correct.

Question 3

Common Stock Dividend Distributable is an asset account.

Accepted Answer

A) True 
 B)False

Question 4

A stock split:

Accepted Answer

A)  increases the number of shares outstanding. 
B)  reduces the par or stated value in proportion. 
C)  is the same as a cash dividend. 
D)  Both A and B are correct.

Question 5

Issuing a stock dividend would show a debit to Common Stock and a credit to Common Stock Dividends Distributable.

Accepted Answer

A) True 
 B)False

Question 6

Ample Corporation's balance in Retained Earnings is $130,000. The board of directors directs that $65,000 be appropriated for future business expansion. This will cause total retained earnings to:

Accepted Answer

A)  decrease by $65,000. 
B)  increase by $65,000. 
C)  remain at $130,000. 
D)  increase or decrease $65,000, as determined by the board.

Question 7

A prior period adjustment for depreciation would affect what account in the stockholders' equity section?

Accepted Answer

A)  Common Stock 
B)  Paid-in Capital in Excess of Par Value-Common 
C)  Retained Earnings 
D)  Appropriations

Question 8

The entry to record the distribution of the stock dividend would include:

Accepted Answer

A)  a debit to Common Stock. 
B)  a debit to Common Stock Dividend Distributable. 
C)  a debit to Retained Earnings. 
D)  None of these answers is correct.

Question 9

Market Value is defined as:

Accepted Answer

A)  the price a corporation pays when it reserves the right to retire or redeem stock at a specific price. 
B)  the price at which shares are bought and sold on the open market. 
C)  the total stockholders' equity minus total amount assigned to preferred stock. 
D)  the total of stockholders' equity (when only common stock exists) divided by the number of shares issued.

Question 10

The Tiger Football Corporation has 9,000 shares of $1.50 par value common stock issued and outstanding. The board of directors declared a 3-for-1 stock split May 10, distributable on June 15, to stockholders of record on June 1. The Retained Earnings account balance is $50,000 on May 10. Prepare the equity section of the balance sheet on May 10 and June 15, before and after the stock split.

Accepted Answer

The answer of The Tiger Football Corporation has 9,000 shares...

Question 11

Farm and Supply reissued 120 shares of treasury stock at $24 that had been reacquired for $11 per share. What is the entry?

Accepted Answer

A)  Debit Cash $2,880; Credit Treasury Stock-Common $1,320, Credit Paid-In Capital from Treasury Stock $1,560 
B)  Debit Cash $2,880; Credit Treasury Stock-Common $2,880 
C)  Debit Cash $1,320; Debit Paid-In Capital from Treasury Stock $1,560, Credit Treasury Stock-Common $2,880 
D)  None of these answers is correct.

Question 12

Before common stock per share is computed, preferred stock is considered.

Accepted Answer

A) True 
 B)False

Question 13

Curtis Corporation's balance sheet included the following:
Common Stock, $5 par value, 5,000 shares issued  Prepare journal entries for the following transactions:

Accepted Answer

The answer of Curtis Corporation's balance sheet included the following:
Common...

Question 14

A stock split has no effect on retained earnings.

Accepted Answer

A) True 
 B)False

Question 15

Using the following accounts:
Indicate the account(s) to be debited and credited to record the following transactions.
-Sold treasury stock at a price equal to cost.
Debit ________ & Credit ________

Accepted Answer

A) Cash 
B) Dividends payable 
C) Preferred stock 
D) Common stock 
E) Common Stock dividend distributable
F)Paid-in capital in excess of par value-common
G)Paid-in capital in excess of par value - preferred
H)Paid-in capital from treasury stock
I)Retained earnings
J)Treasury stock
K)Paid-in capital in excess of par value-Stock dividend

Question 16

On June 7, Ramirez Incorporated paid a $6.25 cash dividend per share on 3,200 shares issued and outstanding. What is the journal entry to record this transaction?

Accepted Answer

A)  Increase to Dividends Payable and a decrease to cash for $20,000 
B)  Increase to Dividends Payable and a decrease to Retained Earnings for $20,000 
C)  Decrease to Cash and a decrease to Retained Earnings for $20,000 
D)  Decrease to Cash and a decrease to Dividends Payable for $20,000

Question 17

The board of Marpa, Inc. declared a $3 per share cash dividend on common stock. The corporation has 5,000 shares of common stock outstanding. The entry required to declare the dividend is:

Accepted Answer

A)  debit Cash; credit Common Dividends Payable. 
B)  debit Cash Dividends; credit Common Dividends Payable. 
C)  debit Common Dividends Payable; credit Cash. 
D)  debit Retained Earnings; credit Dividends Payable.

Question 18

An appropriation to retained earnings reduces total shareholders' equity.

Accepted Answer

A) True 
 B)False

Question 19

Treasury stock is:

Accepted Answer

A)  common stock that is issued in a stock dividend. 
B)  common or preferred stock that has been reacquired by the corporation. 
C)  previously issued common stock that has been canceled. 
D)  unissued, but authorized common stock.

Question 20

Which of the following is NOT a reason why a corporation would reacquire previously issued stock?

Accepted Answer

A)  A need to issue more stock for stock option plans 
B)  A need to issue more stock for use in acquiring other corporations 
C)  A desire to reduce the number of shares of stock outstanding 
D)  All of the above are correct reasons.

Exam 19: Corporations: Stock Values, Dividends, Treasury Stocks,

Prepare the following journal entries for Complex Company. March 15 Declared the stated dividend on 8,000 shares of $12 par, 7% preferred stock. April 15 Paid the dividend.

A corporation may issue a stock dividend for which of the following reasons?

Common Stock Dividend Distributable is an asset account.

A stock split:

Issuing a stock dividend would show a debit to Common Stock and a credit to Common Stock Dividends Distributable.

Ample Corporation's balance in Retained Earnings is $130,000. The board of directors directs that $65,000 be appropriated for future business expansion. This will cause total retained earnings to:

A prior period adjustment for depreciation would affect what account in the stockholders' equity section?

The entry to record the distribution of the stock dividend would include:

Market Value is defined as:

Farm and Supply reissued 120 shares of treasury stock at $24 that had been reacquired for $11 per share. What is the entry?

Before common stock per share is computed, preferred stock is considered.

Curtis Corporation's balance sheet included the following: Common Stock, $5 par value, 5,000 shares issued Prepare journal entries for the following transactions:

A stock split has no effect on retained earnings.

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transactions. -Sold treasury stock at a price equal to cost. Debit & Credit

On June 7, Ramirez Incorporated paid a $6.25 cash dividend per share on 3,200 shares issued and outstanding. What is the journal entry to record this transaction?

The board of Marpa, Inc. declared a $3 per share cash dividend on common stock. The corporation has 5,000 shares of common stock outstanding. The entry required to declare the dividend is:

An appropriation to retained earnings reduces total shareholders' equity.

Treasury stock is:

Which of the following is NOT a reason why a corporation would reacquire previously issued stock?

Exam 19: Corporations: Stock Values, Dividends, Treasury Stocks,

Prepare the following journal entries for Complex Company. March 15 Declared the stated dividend on 8,000 shares of $12 par, 7% preferred stock. April 15 Paid the dividend.

A corporation may issue a stock dividend for which of the following reasons?

Common Stock Dividend Distributable is an asset account.

A stock split:

Issuing a stock dividend would show a debit to Common Stock and a credit to Common Stock Dividends Distributable.

Ample Corporation's balance in Retained Earnings is $130,000. The board of directors directs that $65,000 be appropriated for future business expansion. This will cause total retained earnings to:

A prior period adjustment for depreciation would affect what account in the stockholders' equity section?

The entry to record the distribution of the stock dividend would include:

Market Value is defined as:

Farm and Supply reissued 120 shares of treasury stock at $24 that had been reacquired for $11 per share. What is the entry?

Before common stock per share is computed, preferred stock is considered.

Curtis Corporation's balance sheet included the following: Common Stock, $5 par value, 5,000 shares issued Prepare journal entries for the following transactions:

A stock split has no effect on retained earnings.

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transactions. -Sold treasury stock at a price equal to cost. Debit ________ & Credit ________

On June 7, Ramirez Incorporated paid a $6.25 cash dividend per share on 3,200 shares issued and outstanding. What is the journal entry to record this transaction?

The board of Marpa, Inc. declared a $3 per share cash dividend on common stock. The corporation has 5,000 shares of common stock outstanding. The entry required to declare the dividend is:

An appropriation to retained earnings reduces total shareholders' equity.

Treasury stock is:

Which of the following is NOT a reason why a corporation would reacquire previously issued stock?

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transactions. -Sold treasury stock at a price equal to cost. Debit & Credit