accounting-Which of the following statements about stock dividends is true

accounting-Which of the following statements about stock dividends is true

accounting-Which of the following statements about stock dividends is true

HW5Q1. Multiple Choice questions:1.
Which of the following statements
about stock dividends is true? a)
Stock dividends are reported on the
statement of cash flows.b)
Stock dividends are reported on the
statement of retained earnings.c)
Stock dividends increase total
equity.d)
Stock dividends decrease total
equity.2.
Which order best describes the largest number
of shares to the smallest number of shares? a)
Shares authorized, shares issued,
shares outstanding.b)
Shares issued, shares outstanding,
shares authorized.c)
Shares outstanding, shares issued,
shares authorized.d)
Shares in the treasury, shares
outstanding, shares issued.3. A company issued
100,000 shares of common stock with a par value of $1 per share. The stock sold
for $20 per share. By what amount does stockholders’ equity increase? a)
$100,000b)
$1,900,000c)
$2,000,000d)
No change in stockholders’ equity4. A journal entry is not recorded on what date? a)
Date of declaration.b)
Date of record.c)
Date of payment.d)
A journal entry is recorded on all
of these dates.5. A company has net
income of $225,000 and declares and pays dividends in the amount of $75,000.
What is the net impact on retained earnings? a)
Increase of $225,000b)
Decrease of $75,000c)
Increase of $150,000d)
Decrease of $150,0006. Which statement
regarding dividends is false? a)
Dividends represent a sharing of
corporate profits with owners.b)
Both stock and cash dividends reduce
retained earnings.c)
Cash dividends paid to stockholders
reduce net income.d)
None of the above statements are
false.7. When treasury stock
is purchased with cash, what is the impact on the balance sheet equation? a)
No change: the reduction of the
asset cash is offset with the addition of the asset treasury stock.b)
Assets decrease and stockholders’
equity increases.c)
Assets increase and stockholders’
equity decreases.d)
Assets decrease and stockholders’
equity decreases.Q2. Recording Treasury Stock
Transactions and Analyzing Their ImpactDuring 2014 the following selected
transactions affecting stockholders’ equity occurred for Orlando Corporation:
Required:
Give journal entries for each of these transactions.
Describe the impact, if any, that these transactions
have on the income statement.
Q3.The records of Hollywood Company
reflected the following balances in the stockholders’ equity accounts at
December 31, 2013:
Common stock, par $12 per share, 50,000 shares
outstanding
Preferred stock, 10 percent, par $10 per share, 5,000
shares outstanding
Retained earnings, $216,000
On September 1, 2014, the board of
directors was considering the distribution of an $85,000 cash dividend. No
dividends were paid during the previous two years. Assume that the preferred
stock’s dividends preference is cumulative.Required: Determine
the total and per share amounts that would be paid to the common stockholders
and to the preferred stockholders.Q4.On July 1, 2014, Davidson
Corporation had the following capital structure:
Required: Complete the following comparative
tabulation based on two independent cases:
Case 1:
The board of directors declared and issued a 50 percent stock dividend
when the stock was selling at $12 per share.
Case 2:
The board of directors voted a 6-to-5 stock split (i.e., a 20 percent
increase in the number of shares). The market price prior to the split was
$12 per share.

 

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