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

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Question 61

Multiple Choice

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Dividends Payable is classified as a

A) long-term liability.
B) contra stockholders' equity account to Retained Earnings.
C) current liability.
D) stockholders' equity account.

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Question 62

Multiple Choice

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Cuther Inc., has 1,000 shares of 6%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2009, and December 31, 2010. The board of directors declared and paid a $2,000 dividend in 2009. In 2010, $12,000 of dividends are declared and paid. What are the dividends received by the common stockholders in 2010?

A) $8,000
B) $6,000
C) $4,000
D) $3,000

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Question 63

Multiple Choice

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A credit balance in retained earnings represents

Each of the following decreases total stockholders' equity except a

Which one of the following events would not require a formal journal entry on a corporation's books?

On January 1, Swanson Corporation had 60,000 shares of $10 par value common stock outstanding. On March 17, the company declared a 15% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The stock was distributed on March 30. The entry to record the transaction of March 30 would include a

West, Inc. has a net income of $500,000 for 2010, and there are 200,000 weighted-average shares of common stock outstanding. Dividends declared and paid during the year amounted to $80,000 on the preferred stock and $120,000 on the common stock. The earnings per share for 2010 is

Richman Corporation has 120,000 shares of $5 par value common stock outstanding. It declared a 10% stock dividend on June 1 when the market price per share was $12. The shares were issued on June 30. Instructions Prepare the necessary entries for the declaration and payment of the stock dividend.

Corporation income tax expense is

A stock split

Reese Company reported retained earnings at December 31, 2009, of $310,000. Reese had 160,000 shares of common stock outstanding throughout 2010. The following transactions occurred during 2010. 1. An error was discovered in 2008, depreciation expense was recorded at $60,000, but the correct amount was $50,000. 2. A cash dividend of $0.50 per share was declared and paid. 3. A 5% stock dividend was declared and distributed when the market price per share was $15 per share. 4. Net income was $225,000. Instructions Prepare a retained earnings statement for 2010.

The retained earnings statement

Assume that all balance sheet amounts for Remington Company represent average balance figures. What is the earnings per share for Remington?

Identify which of the following items would be reported as additions (A) or deductions (D) in a Retained Earnings Statement. 1. Net Income 2. Net Loss 3. Cash Dividends 4. Stock Dividends 5. Prior period adjustments to correct for overstatement of prior years' net income 6. Prior period adjustments to correct for understatement of prior years' net income

Earnings per share indicates the net income earned by each share of outstanding common stock.

Harris Corporation had net income of $230,000 and paid dividends of $50,000 to common stockholders and $20,000 to preferred stockholders in 2010. Harris Corporation's common stockholders' equity at the beginning and end of 2010 was $870,000 and $1,130,000, respectively. There are 100,000 weighted-average shares of common stock outstanding. Harris Corporation's earnings per share for 2010 was

On January 1, Edmiston Corporation had 1,000,000 shares of $10 par value common stock outstanding. On March 31, the company declared a 20% stock dividend. Market value of the stock was $15/share. As a result of this event,

Corporations generally issue stock dividends in order to

Jansen Corporation had 300,000 shares of common stock outstanding during the year. Jansen declared and paid cash dividends of $200,000 on the common stock and $160,000 on the preferred stock. Net income for the year was $880,000. What is Jansen's earnings per share?

The per share amount normally assigned by the board of directors to a large stock dividend is