128.Venco Corporation’s December 31, 2010 balance sheet showed the following:
8% preferred stock, $20 par value, cumulative, 10,000 shares
authorized; 7,500 shares issued $ 150,000
Common stock, $10 par value, 1,000,000 shares authorized;
975,000 shares issued, 960,000 shares outstanding 9,750,000
Paid-in capital in excess of par value—preferred stock 30,000
Paid-in capital in excess of par value—common stock 13,500,000
Retained earnings 3,750,000
Treasury stock (15,000 shares) 315,000
Venco declared and paid a $38,000 cash dividend on December 15, 2010. If the company’s dividends in arrears prior to that date were $9,000, Triad’s common stockholders received
a.$29,000.
b.$14,000.
c.$17,000.
d.no dividend.
129.Each of the following decreases retained earnings
except
a
a.cash dividend.
b.liquidating dividend.
c.stock dividend.
d.All of these decrease retained earnings.
130.Each of the following decreases total stockholders' equity
except
a
a.cash dividend.
b.liquidating dividend.
c.stock dividend.
d.All of these decrease total stockholders' equity.
131.Which one of the following is
not
necessary in order for a corporation to pay a cash dividend?
a.Adequate cash
b.Approval of stockholders
c.Declaration of dividends by the board of directors
d.Retained earnings
132.If a corporation declares a dividend based upon paid-in capital, it is known as a
a.scrip dividend.
b.property dividend.
c.paid dividend.
d.liquidating dividend.
133.The date on which a cash dividend becomes a binding legal obligation is on the
a.declaration date.
b.date of record.
c.payment date.
d.last day of the fiscal year-end.
134.The effect of the declaration of a cash dividend by the board of directors is to
Increase Decrease
a.Stockholders' equityAssets
b.AssetsLiabilities
c.Liabilities Stockholders' equity
d.LiabilitiesAssets
135.The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to
a.decrease total liabilities and stockholders' equity.
b.increase total expenses and total liabilities.
c.increase total assets and stockholders' equity.
d.decrease total assets and stockholders' equity.
136.Common Stock Dividends Distributable is classified as a(n)
a.asset account.
b.stockholders' equity account.
c.expense account.
d.liability account.
137.The effect of a stock dividend is to
a.decrease total assets and stockholders' equity.
b.change the composition of stockholders' equity.
c.decrease total assets and total liabilities.
d.increase the book value per share of common stock.