Exam 21: Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

Matrix Corporation estimated at the beginning of 20-- that its income tax for the year would be $140,000. Calculate the estimated income tax payment per quarter and show one of the quarterly entries to pay the taxes. As of December 31, 20--, Matrix Corporation had an actual tax liability of $143,200. Calculate the income tax due and make the necessary adjusting entry.

A credit balance in Income Summary represents net loss; a debit balance represents a net income.

For a stock dividend of less than 20 to 25% of the outstanding shares, Stock Dividends is debited for the par value of the stock to be distributed.

Estimated quarterly income tax payments are due on each of the following dates EXCEPT

An entry to appropriate a portion of retained earnings to finance a future plant expansion would include a credit to

Stock Dividends Distributable is reported as an addition to common stock in the stockholders' equity section of the balance sheet.

When a dividend is declared, Stock Dividends is debited and Cash is credited.

A stock split requires no formal journal entry and may be recognized simply by a memorandum notation in the general journal and in the appropriate capital stock accounts.

An entry is required both on the date of declaration and the date of payment.

All of the following statements concerning Retained Earnings are true EXCEPT

The purpose of a retained earnings appropriation is to inform readers of the balance sheet that

When a small stock dividend is declared and the market value exceeds the par or stated value of the shares, the excess of market value over par or stated value should be entered in which of the following accounts?

Prepare appropriate general journal entries for each of the following transactions for Mainstream Technologies, InC.Mar. 25 Declared a 10% stock dividend to common shareholders. The market value of the common stock is $12 per share. The par value is $10. There are 100,000 shares of common stock currently outstandinG.Apr. 1 Issued the stock certificates for the stock dividenD.July 31 Declared a two-for-one stock split. ​

Even if there are both appropriated and unappropriated retained earnings, the balances are combined when preparing the statement of retained earnings.

If the corporation has a net loss for the period, the closing entry will include a debit to Income Summary and a credit to Retained Earnings.

No dividend can be paid unless so declared by the board of directors.

To explain the change in the amount of retained earnings between successive balance sheet dates, it is customary to prepare a(n)

A corporation generally keeps and reinvests a portion of its net income instead of distributing it to its stockholders.

Corporations can legally declare cash dividends only if the retained earnings balance is sufficient to cover the dividends.

Record the following transaction for Godiva Corporation. Sept. 1 Last year, Godiva's board of directors appropriated $840,000 for the purchase of a new branch office, over a three-year period. This year's appropriation for $280,000 was made on this datE.​