Question 1

Before a three-for-one stock split,the shares outstanding were 5,000 shares at $12 par.After the split,what was the par and number of shares?

Accepted Answer

A) 15,000 shares at $12 per share 
B) 20,000 shares at $6 per share 
C) 15,000 shares at $4 per share 
D) 5,000 shares at $48 per share

Question 2

Which of the following in not true about retained earnings?

Accepted Answer

A) Declaring a stock split will have no effect on retained earnings. 
B) Appropriating retained earnings will have no effect on total stockholders' equity. 
C) Distributing stock dividends will have no effect on retained earnings. 
D) Declaring cash dividends will increase retained earnings.

Question 3

Using the following accounts:
[1]Cash
[2]Dividends payable
[3]Preferred stock
[4]Common stock
[5]Dividend distributable
[6]Paid-in capital in excess of par common stock
[7]Paid-in capital in excess of par preferred stock
[8]Paid-in capital from treasury stock
[9]Retained earnings
[10]Appropriation for plant expansion
[11]Treasury stock
[12]Income summary
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

The answer of Using the following accounts:
[1]Cash
[2]Dividends payable
[3]Preferred stock
[4]Common stock
[5]Dividend...

Question 4

Prepare the following journal entries for Complex Company.
$\text {March 15}$  $\quad $ $\text {Declared the stated dividend on 5,000 shares of $\$ 10$ par, $5 \%$ preferred stock.}$
$\text { April 15}$ $\quad $ $\text {Paid the dividend.}$

Accepted Answer

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

Question 5

Treasury Stock is what type of account?

Accepted Answer

A) Stockholders' equity 
B) Liability 
C) Asset 
D) Contra-stockholders' equity

Question 6

Farm and Supply reissued 100 shares of treasury stock at $20 that had been reacquired for $15 per share.What is the entry?

Accepted Answer

A) Debit Cash $2,000; credit Treasury Stock-Common $1,500,Paid-In Capital from Treasury Stock $500 
B) Debit Cash $2,000; credit Treasury Stock-Common $2,000 
C) Debit Cash $1,500; Paid-In Capital from Treasury Stock $500,credit Treasury Stock-Common $2,000 
D) None of these answers are correct.

Question 7

A corporation sold 20 shares of $20 par value treasury stock for $40 per share.The treasury stock cost $30 per share to acquire.The entry to record the transaction would include a:

Accepted Answer

A) credit to Paid-in Capital-Treasury Stock for $600. 
B) debit to Treasury Stock for $800. 
C) debit to Paid-in Capital Treasury Stock for $200. 
D) debit to Common Stock for $400.

Question 8

Rick's Internet Corporation balance in Retained Earnings is $30,000.The board of directors directs that $15,000 be appropriated for future business expansion.This will cause total retained earnings to:

Accepted Answer

A) remain at $30,000. 
B) increase by $15,000. 
C) decrease by $15,000. 
D) increase or decrease $5,000,as determined by the board.

Question 9

What is the book value per share of common stock if total stockholders' equity is $450,000 with 15,000 shares of common stock outstanding?

Accepted Answer

A) $3.33 
B) $3.00 
C) $300.00 
D) $30.00

Question 10

Appropriations to retained earnings can be:

Accepted Answer

A) contractual only. 
B) an increase in retained earnings. 
C) a decrease in total retained earnings. 
D) None of these answers are correct.

Question 11

The journal entry to pay a cash dividend is to:

Accepted Answer

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

Question 12

A stock split will not affect total stockholders' equity or the number of shares of stock issued.

Accepted Answer

A) True 
 B)False

Question 13

The statement of retained earnings includes the account Preferred Stock.

Accepted Answer

A) True 
 B)False

Question 14

Book value per share is found by dividing total assets by total stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 15

When the corporation has both preferred and common stock,the steps to compute book value for common stock would be:

Accepted Answer

A) compute common shares divided by number of shares outstanding. 
B) compute preferred stock book value first; the remainder is assigned to common stock. 
C) divide total stockholders' equity by total shares outstanding. 
D) None of these answers are correct.

Question 16

In the dividend process,the liability Dividend Payable is recognized on the:

Accepted Answer

A) date of declaration. 
B) date of record. 
C) date of payment. 
D) date of stock issue.

Question 17

Ariel Investigations has total paid-in capital of $90,000 and retained earnings of $60,000.It has 200 shares of $100 par value common stock outstanding.The book value of each share of common stock is:

Accepted Answer

A) $750. 
B) $450. 
C) $300. 
D) $600.

Question 18

Using the following accounts:
[1]Cash
[2]Dividends payable
[3]Preferred stock
[4]Common stock
[5]Dividend distributable
[6]Paid-in capital in excess of par common stock
[7]Paid-in capital in excess of par preferred stock
[8]Paid-in capital from treasury stock
[9]Retained earnings
[10]Appropriation for plant expansion
[11]Treasury stock
[12]Income summary
Indicate the account(s) to be debited and credited to record the following transactions.
-Sold preferred stock at a price above par.
Debit ________ & ________ & ________ Credit ________ & ________ & ________

Accepted Answer

The answer of Using the following accounts:
[1]Cash
[2]Dividends payable
[3]Preferred stock
[4]Common stock
[5]Dividend...

Question 19

An exchange of one share of an old issue of stock for a multiple number of shares of a new issue of stock with reduced par value is known as a:

Accepted Answer

A) property dividend. 
B) stock dividend. 
C) stock split. 
D) liquidating dividend.

Question 20

Par value is the price per share a corporation pays to holders of stock when it is redeemed.

Accepted Answer

A) True 
 B)False

Exam 19: Corporations: Stock Values, dividends, treasury Stocks, and Retained Earnings

Before a three-for-one stock split,the shares outstanding were 5,000 shares at $12 par.After the split,what was the par and number of shares?

Which of the following in not true about retained earnings?

Prepare the following journal entries for Complex Company. $\text {March 15}$ $\quad$ $\text {Declared the stated dividend on 5,000 shares of \$ 10 par, \(5 \%\) preferred stock.}$ $\text { April 15}$ $\quad$ $\text {Paid the dividend.}$

Treasury Stock is what type of account?

Farm and Supply reissued 100 shares of treasury stock at $20 that had been reacquired for $15 per share.What is the entry?

A corporation sold 20 shares of $20 par value treasury stock for $40 per share.The treasury stock cost $30 per share to acquire.The entry to record the transaction would include a:

Rick's Internet Corporation balance in Retained Earnings is $30,000.The board of directors directs that $15,000 be appropriated for future business expansion.This will cause total retained earnings to:

What is the book value per share of common stock if total stockholders' equity is $450,000 with 15,000 shares of common stock outstanding?

Appropriations to retained earnings can be:

The journal entry to pay a cash dividend is to:

A stock split will not affect total stockholders' equity or the number of shares of stock issued.

The statement of retained earnings includes the account Preferred Stock.

Book value per share is found by dividing total assets by total stockholders' equity.

When the corporation has both preferred and common stock,the steps to compute book value for common stock would be:

In the dividend process,the liability Dividend Payable is recognized on the:

Ariel Investigations has total paid-in capital of $90,000 and retained earnings of $60,000.It has 200 shares of $100 par value common stock outstanding.The book value of each share of common stock is:

An exchange of one share of an old issue of stock for a multiple number of shares of a new issue of stock with reduced par value is known as a:

Par value is the price per share a corporation pays to holders of stock when it is redeemed.