Answers are words in bold letter

• Peter Corporation issues a Common Stock dividend. The entry to record this transaction will:
  • Decrease the Common Stock’s par value.
  • Increase total Common Stock shares issued and outstanding.
  • Increase the Corporation’s Retained Earnings account.
  • Decrease the Corporation’s Cash account.

 

• On what date is a Corporation’s liability for a Dividend recognized?
  • The date of record
  • The date of payment
  • The date of announcement
  • The date of declaration

 

• The reduction of par or stated value of stock by issuance of a proportionate number of additional shares is termed a:
  • Liquidating dividend
  • Stock split
  • Stock option
  • Preferred dividend

 

• A Corporation’s primary rationale for a stock split is to:
  • Increase Paid-In Capital.
  • Reduce the per share market price of the Common Stock.
  • Increase the par value of the Common Stock.
  • Increase Retained Earnings.

 

• A 2-for-1 stock split:
  • Doubles Retained Earnings.
  • Increases the par value of all authorized stock by 50%.
  • Doubles the number of Common Stock shares outstanding.
  • Requires a transfer of retained earnings to contributed capital.

 

• Treasury Stock is reported in which section of the balance sheet?
  • Fixed assets
  • Long-term Liabilities
  • Stockholders’ Equity
  • Plant Assets

 

• Treasury Stock represents stock that is:
  • Authorized but not issued
  • Issued and outstanding
  • Issued but not outstanding
  • Authorized and outstanding

 

 

 

• The entry to record the purchase of 5,000 shares of a corporation’s own $20 par common stock at $25, paid in cash, includes a debit to:
  • Common Stock
  • Paid-In Capital in Excess of Par
  • Retained Earnings
  • Treasury Stock

 

• Heather Corporation purchases 20,000 shares of its own $20 par common stock for $35 per share. What will be the effect on Heather’s Total Stockholders’ equity?
  • Increase by $400,000
  • Increase by $700,000
  • Decrease by $400,000
  • Decrease by $700,000

 

• Which of the following statements about Treasury Stock is true?
  • It is classified as an asset on the balance sheet.
  • It allows management to vote for members of the board of directors.
  • It is considered outstanding stock.
  • It usually has a debit balance.

 

• Colby Corporation issues 20,000 shares of $10 par value Common Stock at $14 per share. Contributed Capital in Excess of Par, is credited for:
  • $280,000
  • $ 80,000
  • $200,000
  • None of the above

 

• Colby Corporation issues 30,000 shares of $5 par value Common Stock at $20 per share. Contributed Capital in Excess of Par, is credited for:
  • $ 30,000
  • $ 150,000
  • $ 450,000
  • $ 600,000

 

• Flight Incorporated presents the following information:

 

• Common Stock

• $1,000,000

• Paid-In Capital Excess of Par

• $80,000

• Retained Earnings

• $380,000

• Treasury Stock

• $40,000

 

• What is the total stockholders’ equity based on the following account balances?
• $ 1,040,000
• $ 1,060,000
• $ 1,420,000
• $ 1,500,000

 

 

 

• Antech Corporation has 50,000 shares of $100 par value stock outstanding. If Antech issues a 4-for-1 stock split, the number of shares outstanding after the split will be:
  • 200,000 shares
  • 50,000 shares
  • 250,000 shares
  • 12,500 shares

 

• Lawretz Corporation has 4,000,000 authorized shares of $9 par-value common stock, with 600,000 shares issued and outstanding. After a 3-for-1 stock split, Lawretz Corporation would have:
  • 1,800,000 shares of Common Stock issued and outstanding at $3 par
  • 200,000 shares of Common Stock issued and outstanding at $27 par
  • 12,000,000 shares of Common Stock outstanding at $3 par
  • 1,333,333 shares of Common Stock outstanding at $27 per share

 

• Serene Corporation has 100,000 shares of $15 par Common Stock outstanding. Serene declares a 7,000 share Stock Dividend when the market value of the stock is $24 per share. By what amount will the Common Stock account increase after completing this transaction?</font>
  • $ 105,000
  • $ 150,000
  • $1,500,000
  • $2,400,000

 

• Serene Corporation has 100,000 shares of $15 par Common Stock outstanding. Serene declares a 7,000 share Stock Dividend when the market value of the stock is $24 per share. By what amount will the Contributed Capital in Excess of Par account increase after completing this transaction?
  • $ 105,000
  • $ 150,000
  • $ 63,000
  • $ 168,000

 

• Red River Corporation has 80,000 shares of $14 par-value common stock outstanding. If the corporation declares a 15 percent stock dividend and the market value of the stock on the date of declaration is $22 per share, what amount should be credited to the Contributed Capital in Excess of Par account?
  • $264,000
  • $ 96,000
  • $ -0-
  • $168,000

 

• Carother Corporation’s charter provides for the issuance of 200,000 shares of common stock. Assume that 120,000 shares are originally issued and 10,000 are subsequently reacquired.  What is the amount of cash dividends to be paid if a $1 per share dividend is declared?
  • $120,000
  • $ 10,000
  • $200,000
  • $110,000

 

 

• AnchorTech Corporation has 100,000 authorized shares of $5 par common stock. AnchorTech issued 40,000 shares at $7.  Subsequently, the company declared a 2% stock dividend on a date when the market price was $9 a share.  The effect of the declaration and issuance of the stock dividend is to:
  • Retained Earnings: Decrease; Common Stock: Increase; Contributed Capital in Excess of Par: Increase
  • Retained Earnings: Increase; Common Stock: Decrease; Contributed Capital in Excess of Par: Decrease
  • Retained Earnings: Increase; Common Stock: Decrease; Contributed Capital in Excess of Par: Increase
  • Retained Earnings: Decrease; Common Stock: Increase; Contributed Capital in Excess of Par: Decrease

 

• Quinn Company is authorized to issue 100,000 shares of $10 par value common stock. On December 31, 2000, Quinn Company had 35,000 shares issued and outstanding.  The company bought back 5,000 shares of its own stock on April 3, 2001.  The number of shares issued on April 4, 2001, are:
  • 35,000
  • 30,000
  • 40,000
  • 95,000

 

• Quinn Company is authorized to issue 100,000 shares of $10 par value common stock. On December 31, 2000, Quinn Company had 35,000 shares issued and outstanding.  The company bought back 5,000 shares of its own stock on April 3, 2001.  The number of shares outstanding on April 4, 2001, is:
  • 35,000
  • 30,000
  • 40,000
  • 95,000

 

• Snell Corporation has issued 20,000 shares of $10 par value common stock and 4,000 shares of 5%, $50 par value cumulative preferred stock. The total amount of dividends payable to preferred stockholders each year is:
  • $200
  • $5,000
  • $10,000
  • $20,000

 

• Snell Corporation started operations on January 1, 2000. The company has issued 20,000 shares of $10 par value common stock and 4,000 shares of 5%, $50 par value cumulative preferred stock.  The board of directors declared dividends of $5,000 and $21,000 in 2000 and 2001 respectively.  The  amount of dividends paid to common stockholders in 2001 is:
  • $11,000
  • $6,000
  • $11,500
  • $1,000

 

 

• Snell Corporation started operations on January 1, 2000. The company has issued 20,000 shares of $10 par value common stock and 4,000 shares of 5%, $50 par value preferred stock.  Assume that the preferred stock is not cumulative.  The board of directors declared dividends of $5,000 and $21,000 in 2000 and 2001 respectively.  The  amount of dividends paid to common stockholders in 2001 is:
  • $11,000
  • $6,000
  • $11,500
  • $1,000

 

• Johansen Corporation is authorized to issue 150,000 shares of $1 par value common stock. On December 31, 2000, Johansen Corporation had 80,000 shares issued and outstanding.  The company issued a 10% stock dividend on March 30, 2001.  The par value of the stock on March 31, 2001, is:
  • $0.50
  • $1.10
  • $0.90
  • $1.00

 

• Johansen Corporation is authorized to issue 150,000 shares of $1 par value common stock. On December 31, 2000, Johansen Corporation had 80,000 shares issued and outstanding.  The company issued a 10% stock dividend on March 30, 2001.  The number of shares outstanding on March 31, 2001, is:
  • 88,000
  • 80,000
  • 72,000
  • 8,000

 

• Ehrlich Corporation is authorized to issue 175,000 shares of $1 par value common stock. On December 31, 2000, Ehrlich Corporation had 30,000 shares issued and outstanding.  The company issued a 3 for 1 stock split on June 29, 2001.  The number of shares outstanding on June 30, 2001, is:
  • 10,000
  • 90,000
  • 30,000
  • 85,000

 

• Ehrlich Corporation is authorized to issue 175,000 shares of $1 par value common stock. On December 31, 2000, Ehrlich Corporation had 30,000 shares issued and outstanding.  The company issued a 3 for 1 stock split on June 29, 2001.  The par value of the stock on June 30, 2001, is:
  • $0.33
  • $3.00
  • $1.30
  • $1.00

 

 

 

 

 

• Dividends payable is credited for the amount of cash dividends on:
  • Date of record
  • Date of declaration
  • Date of payment
  • Last date in the fiscal period