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

The owner of 100 shares of stock of a corporation with 2,000 shares of stock outstanding has a 5% interest in the total stockholders' equity. If a 20% stock dividend is declared and distributed a 5% interest in the total stockholders' equity prior to the stock dividend, would have which of the following interests in the equity after the stock dividend was distributed?

The names of stockholders entitled to receive dividends are determined on the date of payment.

Prepare journal entries for each of the following transactions of Telecommunications, InC.Apr. 15 Declared a dividend of $1.43 per share on 11,000 shares of preferred stock outstandinG.May 19 Paid the dividend declared on April 15. ​

Match the terms with the definitions. -A distribution of earnings by a corporation to its stockholders.

Unappropriated Retained Earnings will decrease because of net losses, declarations of cash or stock dividends, and appropriations.

Most corporations must estimate their annual income taxes and make quarterly tax payments.

A statement of retained earnings is used to explain the change in the amount of retained earnings between two successive balance sheet dates.

The journal entry made on the date of declaration of a cash dividend to common stockholders includes

A proportionate distribution of shares of a corporation's own stock to its stockholders is called a property dividend.

Which of the following would not be shown on the statement of retained earnings?

Match the terms with the definitions. -An exchange of one share of an old issue of stock for multiple shares of a new issue with a reduced par or stated value.

A stock dividend may be distributed even if the company is short of cash.

Upon the date of declaration of a dividend, the corporation has incurred a liability for the dividend.

The balance of the income summary account of a corporation is transferred to the capital stock account.

Three dates are involved in the declaration and payment of dividends-the date of declaration, the date of record, and the date of payment.

When a stock dividend is distributed, the account to be debited would be

All of the following statements concerning appropriation of retained earnings are true EXCEPT

Most corporations must estimate their annual income taxes and make

When a dividend is paid in cash, it is known as a

Match the terms with the definitions. -A statement that explains the change in the amount of retained earnings during the year.