Exam 14: Corporations: Dividends, Retained Earnings, and Income Reporting

Bedazzle Corporation had 440000 shares of common stock outstanding during the year. Norman declared and paid cash dividends of $400000 on the common stock and $320000 on the preferred stock. Net income for the year was $1760000. What is Bedazzle's earnings per share?

Retained earnings that are restricted are unavailable for dividends.

A statement of comprehensive income is presented in

Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections: Total Assets Total Liabilities Total Stockholders' Equity A) Increase Decrease No change B) No change Increase Decrease C) Decrease Increase Decrease D) Decrease No change Increase

A detailed stockholders' equity section in the balance sheet will list the names of individuals who are eligible to receive dividends on the date of record.

On January 1 2017 Triad Corporation had 60000 shares of $1 par value common stock issued and outstanding. During the year the following transactions occurred: Mar. 1 Issued 25000 shares of common stock for $550000. June 1 Declared a cash dividend of $2.00 per share to stockholders of record on June 15. June 30 Paid the $2.00 cash dividend. Dec. 1 Purchased 5000 shares of common stock for the treasury for $22 per share. Dec. 15 Declared a cash dividend on outstanding shares of $2.25 per share to stockholders of record on December 31. Instructions Prepare journal entries to record the above transactions.

The income statement for Manassa Inc. shows income before income taxes $1600000 income tax expenses $820000 and net income $780000. If Manassa declared $300000 of cash dividends on preferred stock and has 200000 shares of common stock outstanding throughout the year earnings per share is:

A dividend based on paid-in capital is termed a liquidating dividend.

A corporation is not committed to a legal obligation when it declares

Both a stock split and a stock dividend will _________________ the number of shares outstanding and have _________________ on total stockholders' equity.

The following information is available for Evans Corporation: Average common stockholders' equity \ 1,500,000 \ 1,000,000 Average total stockholders' equity 2,000,000 1,500,000 Common dividends declared and paid 72,000 50,000 Preferred dividends declared and paid 30,000 30,000 Net income 350,000 300,000 Instructions Compute the return on common stockholders' equity for both years. Briefly comment on your findings.

Which of the following statements regarding the date of a cash dividend declaration is not accurate?

Laser Inc. has 1000 shares of 6% $50 par value cumulative preferred stock and 100000 shares of $1 par value common stock outstanding at December 31 2017 and December 31 2016. The board of directors declared and paid a $2500 dividend in 2016. In 2017 $12000 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2017?

Solaris Inc. has 2000 shares of 5% $10 par value cumulative preferred stock and 50000 shares of $1 par value common stock outstanding at December 31 2017. What is the annual dividend on the preferred stock?

Record the following transactions for Tri-State Corporation on the dates indicated. 1. On March 31 2017 Tri-State Corporation discovered that Depreciation Expense on equipment for the year ended December 31 2016 had been recorded twice for a total amount of $84000 instead of the correct amount of $42000. 2. On June 30 2017 the company's internal auditors discovered that the April 2017 telephone bill for $3700 had erroneously been charged to the Interest Expense account. 3. On August 14 2017 cash dividends on preferred stock of $150000 declared on July 1 2017 were paid.

A retained earnings statement shows the same information as a corporation income statement.

Match the items below by entering the appropriate code letter in the space provided.

Of the various dividends types the two most common types in practice are

Common Stock Dividends Distributable is shown within the Paid-in Capital subdivision of the stockholders' equity section of the balance sheet.

On October 10 the board of directors of Pinto Corporation declared a 10% stock dividend. On October 10 the company had 10000 shares of $1 par common stock issued and outstanding with a market price of $16 per share. The stock dividend will be distributed on October 31 to shareholders of record on October 25. Journalize the entries needed for the declaration and distribution of the stock dividend.