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Exam 13: Stockholders Equity

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Question 71

True/False

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Dividends can be paid in the form of cash,stock,or other property.

A) True
B) False

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Question 72

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Cash dividends and stock splits decrease the Retained Earnings account.

A) True
B) False

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Question 73

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If a company retires preferred stock,________.

Errors are corrected by adjusting the beginning balance in the Retained Earnings account in the period the error is discovered.

Which of the following requires a formal journal entry?

Which of the following is true of a corporation?

Scotland Corporation had net income for 2018 of $80,000.Scotland had 13,000 shares of common stock outstanding at the beginning of the year and 24,000 shares of common stock outstanding at the end of the year.There were 12,000 shares of preferred stock outstanding all year.During 2018,Scotland declared and paid preferred dividends of $21,000.What is Scotland's earnings per share? (Round the answer to two decimal places. )

A corporation will never pay dividends on treasury stock.

Electric,Inc.was incorporated on January 1,2016.Electric issued 4000 shares of common stock and 1200 shares of preferred stock on that date.The preferred stock is cumulative,$100 par,with an 12% dividend rate.Electric has not paid any dividends yet.In 2019,Electric had its first profitable year,and on November 1,2019,Electric declared a total dividend of $63,000.What is the total amount that will be paid to preferred shareholders?

On the date of record for a dividend,the company ________.

Earnings per share is a liquidity measure that is used to compare companies of different sizes.

Income tax expense is added to arrive at income from continuing operations.

Stock dividends are declared by the ________.

A corporation has 10,000 shares of 20%,$60 par cumulative preferred stock outstanding and 32,000 shares of no-par common stock outstanding.Preferred dividends of $22,000 are in arrears.At the end of the current year,the corporation declares a dividend of $236,000.What is the dividend per share for preferred stock and for common stock? (Round your answer to the nearest cent. )

Which of the following statements regarding corporations is incorrect?

The statement of stockholders' equity has less information than the statement of retained earnings.

Which of the following is included in the entry to record the issuance of 14,000 shares of $7 par value common stock at $21 per share for cash?

A company originally issued 14,000 shares of $5 par value common stock at $12 per share.The board of directors declares a 14% stock dividend when the market price of the stock is $25 a share.Which of the following is included in the entry to record the declaration of a stock dividend?

May,Inc.had the following transactions in 2019,its first year of operations: • Issued 20,000 shares of common stock.The stock has a par value of $3.00 per share and was issued at $19.00 per share. • Issued 2000 shares of $200 par value preferred stock at par. • Earned net income of $40,000. • Paid no dividends. At the end of 2019,what is the total amount of paid-in capital?

A small stock dividend,a large stock dividend and a stock split have no effect on total assets.