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A corporation is a separate legal entity that is organized independently of its owners.

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The entry to record the payment of a previously declared dividend of $1.50 per share on 16,500 shares of common stock includes a ________.


A) debit to Cash Dividends for $24,750
B) debit to Cash $24,750
C) credit to Cash Dividends for $24,750
D) debit to Dividends Payable for $24,750

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A company originally issued 20,000 shares of $9 par value common stock at $13 per share. The board of directors declares an 9% stock dividend when the market price of the stock is $24 a share. Which of the following is included in the entry to record the declaration of a stock dividend?


A) Stock Dividends is debited for $21,600.
B) Common Stock-$9 Par Value is credited for $41,400.
C) Common Stock is credited for $43,200.
D) Stock Dividends is debited for $43,200.

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A corporation declares a dividend of $2.00 per share on 11,000 shares of common stock. Which of the following is included in the entry to record the declaration?


A) Cash Dividends is debited for $22,000.
B) Paid-In Capital in Excess of Par-Common is credited for $22,000.
C) Cash Dividends is credited for $22,000.
D) Dividends Payable-Common is debited for $22,000.

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Which of the following is the correct description of dividends in arrears?


A) the cumulative amount of dividends that were not paid in previous years
B) the cumulative amount of dividends that were paid in previous years
C) the amount of dividends that were paid after the payment date
D) the amount of dividends that will be paid in the next year

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In the event of a corporate liquidation, preferred stockholders ________.


A) are guaranteed to receive a full refund of the stock purchase price
B) have first claim on remaining corporate assets after debts are paid
C) are guaranteed to receive the par value of the preferred stock
D) may retain their proportionate share of voting rights

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Bradley Corporation received cash from issuing 10,000 shares of common stock at par on January 1, 2017. The stock has a par value of $0.01 per share. Which is the correct journal entry to record this transaction?


A) Cash is debited for $100, and Common Stock-$0.01 Par Value is credited for $100.
B) Cash is credited for $10,000 and Common Stock-$0.01 Par Value is debited for $10,000.
C) Paid-In Capital in Excess of Par-Common is debited for $9,900, and Common Stock-$0.01 Par Value is credited for $9,900.
D) Cash is debited for $10,000, Common Stock-$0.01 Par Value is credited for $100, and Paid-In Capital in Excess of Par-Common credited for $9,900.

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Maywood, Inc. has 13,000 shares of common stock outstanding. A stockholder has 500 shares. If the company distributes a 23% stock dividend, the stockholder now holds ________ shares of Maywood stock.


A) 615
B) 2,990
C) 500
D) 115

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Green Apron, Inc. had the following transactions in 2017, its first year of operations: ā€¢ Issued 35,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $23.00 per share. ā€¢ Earned net income of $77,000. ā€¢ Paid no dividends. At the end of 2017, what is the total amount of paid-in capital?


A) $35,000
B) $882,000
C) $805,000
D) $77,000

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The statement of stockholders' equity does not show the changes to the Retained Earnings account because that information is provided in the statement of retained earnings.

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Which of the following types of stock has less investment risk?


A) common stock
B) par value stock
C) no-par stock
D) preferred stock

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When a previously declared dividend is paid, which of the following occurs?


A) assets increase
B) stockholders' equity increases
C) liabilities decrease
D) assets remain unchanged

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Treasury stock is ________.


A) a contra equity account
B) a contra asset account
C) a liability account
D) an asset account

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Lafayette, Inc. was incorporated on January 1, 2014. Lafayette issued 5,000 shares of common stock and 700 shares of preferred stock on that date. The preferred stock is cumulative, $100 par, with an 10% dividend rate. Lafayette has not paid any dividends yet. In 2017, Lafayette had its first profitable year, and on November 1, 2017, Lafayette declared a total dividend of $40,000. What is the total amount that will be paid to common stockholders?


A) $7,000
B) $28,000
C) $12,000
D) $40,000

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On November 1, 2017, President, Inc. declared a dividend of $3.00 per share. President, Inc. has 10,000 shares of common stock outstanding and 20,000 of preferred stock. The date of record is November 15, and the payment date is November 30, 2017. Regarding the date of record, which of the following statements is true?


A) No journal entry is made on the date of record.
B) The liability must be recorded on the date of record.
C) Cash is disbursed to shareholders on the date of record.
D) The company transfers cash to a brokerage firm on the date of record.

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Which of the following statements is true of a corporation?


A) Shareholders can be required to pay debts of the corporation.
B) Shares of stock cannot be readily purchased and sold by investors on an organized stock exchange.
C) Shareholders are authorized to sign contracts or make business commitments on behalf of the corporation.
D) Corporations pay income tax on corporate earnings, and shareholders pay income tax on corporate dividends.

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Which of the following requires a formal journal entry?


A) selection of a new CEO
B) stock dividend distribution
C) stock split
D) date of record

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Peterson, Inc. issued 4,000 shares of preferred stock for $280,000. The stock has a par value of $70 per share. The journal entry to record this transaction would ________.


A) credit Cash $280,000, debit Preferred Stock-$70 Par Value $4,000, and debit Paid-In Capital in Excess of Par-Preferred $276,000
B) debit Cash $280,000, credit Preferred Stock-$70 Par Value $4,000, and credit Paid-In Capital in Excess of Par-Preferred $276,000
C) credit Cash $280,000 and debit Preferred Stock-$70 Par Value $280,000
D) debit Cash $280,000 and credit Preferred Stock-$70 Par Value $280,000

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The rate of return on common stockholders' equity shows the relationship between net income available to common stockholders and their average common equity invested in the company.

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If treasury shares are sold for less than their cost, the difference is recorded as a loss.

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Showing 181 - 200 of 206

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