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

Pippin Company has 70,000 shares of $14 par common stock outstanding. On July 1, the board of directors declared a two-for-one stock split. Prepare the memorandum entry in the general journal indicating the new par value and the total number of outstanding shares of common stock.

Light Touch, Inc. has 110,000 shares of $8 par common stock outstanding. On July 1, the board of directors declared a two-for-one stock split. Prepare the memorandum entry in the general journal indicating the new par value and the total number of outstanding shares of common stock.

Match the terms with the definitions. -The date on which the names of stockholders entitled to receive the dividend are determined.

Corporations are subject to specific corporate tax rates different from those for individuals.

In a corporation, the capital resulting from the retention of earnings is entered in the

Match the terms with the definitions. -The date on which the dividend is actually paid by the corporation.

Prepare the journal entry for the following transaction. Apr. 15 Last year, Titan Corporation's board of directors appropriated $150,000 for the purchase of a new storage facility over a three-year period. This year's appropriation for $50,000 was made on this datE.​

Income taxes for a corporation are normally reported as a separate expense item on the income statement.

Appropriation of retained earnings has been used primarily to limit the availability of retained earnings for paying stockholders' dividends.

At year-end, an adjusting entry is necessary to recognize the correct amount of income taxes the corporation must pay for the year.

Santiago Corporation estimated at the beginning of 20-- that its income tax for the year would be $200,000. Calculate the estimated income tax per quarter and show one of the quarterly entries to pay the taxes. As of December 31, 20-- Santiago Corporation had an actual tax liability of $200,437. Calculate the income tax due and make the necessary adjusting entry.

When an appropriation of retained earnings is made, total retained earnings is decreased.

The board of directors declared a $2 per share cash dividend on common stock and the corporation had 5,000 shares authorized and 4,000 shares outstanding. The entry required to record the declaration of dividends would be

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, that stockholder would own which of the following number of shares?

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

The board of directors declared a $2 per share cash dividend on common stock and the corporation had 5,000 shares authorized and 4,000 shares outstanding and make a journal entry. The journal entry for the dividend payment would be

Dividends on different classes of capital stock should be accounted for separately.

Match the terms with the definitions. -A proportionate distribution of shares of a corporation's own stock to its stockholders.

The ending balance of the retained earnings account on the statement of retained earnings is the same amount that appears in the stockholders' equity section of the balance sheet.

A retained earnings appropriation is a restriction of retained earnings by