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On January 1 Weiss Corporation had 60,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following transactions occurred: On January 1 Weiss Corporation had 60,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following transactions occurred: Instructions (a) Prepare the entries, if any, on each of the three dates that involved dividends. (b) How are dividends and dividends payable reported in the financial statements prepared at December 31? Instructions (a) Prepare the entries, if any, on each of the three dates that involved dividends. (b) How are dividends and dividends payable reported in the financial statements prepared at December 31?

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blured image (b) In the retained earnings ...

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A corporation purchases 15,000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?


A) Increase by $525,000.
B) Decrease by $300,000.
C) Decrease by $525,000.
D) Decrease by $225,000.

E) B) and C)
F) C) and D)

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Two classifications appearing in the paid-in capital section of the balance sheet are


A) preferred stock and common stock.
B) paid-in capital and retained earnings.
C) capital stock and additional paid-in capital.
D) capital stock and treasury stock.

E) A) and B)
F) A) and C)

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All of the following statements regarding retained earnings are true except


A) retained earnings represents a claim on cash.
B) a debit balance in Retained Earnings indicates a deficit.
C) some companies may restrict availability of retained earnings for dividends.
D) retained earnings is net income that a company retains in a business.

E) A) and D)
F) B) and D)

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From the information below, compute the payout ratio for Kevin's Trailers.  Net Income $200 Cash Dividends (common)  40 Retained Earnings 500 Stock Dividends (common)  10\begin{array} { l r } \text { Net Income } & \$ 200 \\\text { Cash Dividends (common) } & 40 \\\text { Retained Earnings } & 500 \\\text { Stock Dividends (common) } & 10\end{array}


A) 25%.
B) 20%.
C) 8%.
D) 2%.

E) C) and D)
F) B) and D)

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CAB Inc. has 1,000 shares of 6%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2014. What is the annual dividend on the preferred stock?


A) $60 per share.
B) $6,000 in total.
C) $600 in total.
D) $0.60 per share.

E) A) and C)
F) C) and D)

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Nance Corporation's December 31, 2014 balance sheet showed the following: Nance Corporation's December 31, 2014 balance sheet showed the following: Nance declared and paid a $75,000 cash dividend on December 15, 2014. If the company's dividends in arrears prior to that date were $18,000, Nance's common stockholders received A) $57,000. B) $27,000. C) $33,000. D) no dividend. Nance declared and paid a $75,000 cash dividend on December 15, 2014. If the company's dividends in arrears prior to that date were $18,000, Nance's common stockholders received


A) $57,000.
B) $27,000.
C) $33,000.
D) no dividend.

E) A) and B)
F) None of the above

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During 2014 Kenton Corporation had the following transactions and events: 1. Issued par value preferred stock for cash at par value 2. Issued par value common stock for cash at an amount greater than par value 3. Completed a 2 for 1 stock split in which the $10 par value common stock was changed to $5 par value stock *4. Declared a small stock dividend when the market value was higher than the par value 5. Declared a cash dividend *6. Issued the shares of common stock required by the stock dividend declaration in 4. above 7. Issued par value common stock for cash at par value 8. Paid the cash dividend Instructions Indicate the effect(s) of each of the foregoing items on the subdivisions of stockholders' equity. Present your answers in tabular form with the following columns. Use (I) for increase, (D) for decrease, and (NE) for no effect. During 2014 Kenton Corporation had the following transactions and events: 1. Issued par value preferred stock for cash at par value 2. Issued par value common stock for cash at an amount greater than par value 3. Completed a 2 for 1 stock split in which the $10 par value common stock was changed to $5 par value stock *4. Declared a small stock dividend when the market value was higher than the par value 5. Declared a cash dividend *6. Issued the shares of common stock required by the stock dividend declaration in 4. above 7. Issued par value common stock for cash at par value 8. Paid the cash dividend Instructions Indicate the effect(s) of each of the foregoing items on the subdivisions of stockholders' equity. Present your answers in tabular form with the following columns. Use (I) for increase, (D) for decrease, and (NE) for no effect.

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If a corporation pays taxes on its income, then stockholders will not have to pay taxes on the dividends received from that corporation.

A) True
B) False

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The term legal capital is a descriptive term for


A) stockholders' equity.
B) par value.
C) residual equity.
D) market value.

E) A) and C)
F) A) and B)

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Dividends in arrears are liabilities of the corporation.

A) True
B) False

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Treasury shares plus outstanding shares equal


A) authorized stock.
B) issued stock.
C) unissued stock.
D) distributable stock.

E) C) and D)
F) A) and D)

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Which of the following statements reflects the transferability of ownership rights in a corporation?


A) If a stockholder decides to transfer ownership, he must transfer all of his shares.
B) A stockholder may dispose of part or all of his shares.
C) A stockholder must obtain permission of the board of directors before selling shares.
D) A stockholder must obtain permission from at least three other stockholders before selling shares.

E) None of the above
F) A) and B)

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Treasury stock is a contra stockholders' equity account.

A) True
B) False

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


A) 2-for-1 stock split.
B) 100% stock dividend.
C) 2% stock dividend.
D) $1 per share cash dividend.

E) B) and D)
F) All of the above

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If Pratt Company issues 5,000 shares of $5 par value common stock for $210,000, the account


A) Common Stock will be credited for $185,000.
B) Paid-in Capital in Excess of Par Value will be credited for $210,000.
C) Paid-in Capital in Excess of Par Value will be credited for $235,000.
D) Cash will be debited for $210,000.

E) C) and D)
F) All of the above

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Three important dates associated with dividends are the: (1)___________________, (2)__________________, and (3)__________________.

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declaratio...

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The return on common stockholders' equity is computed by dividing net income


A) by ending common stockholders' equity.
B) by average common stockholders' equity.
C) less preferred dividends by ending common stockholders' equity.
D) less preferred dividends by average common stockholders' equity.

E) All of the above
F) B) and C)

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A corporation has the following account balances: Common Stock, $1 par value, $80,000; Paid-in Capital in Excess of Par Value, $2,700,000. Based on this information, the


A) legal capital is $2,780,000.
B) number of shares issued is 80,000.
C) number of shares outstanding is 2,780,000.
D) average price per share issued is $3.48.

E) A) and B)
F) All of the above

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The two ways that a corporation can be classified by ownership are


A) publicly held and privately held.
B) stock and non-stock.
C) inside and outside.
D) majority and minority.

E) All of the above
F) A) and D)

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