206.On December 1, 2013, the Board of directors of Dew Laurintis Company declared a €.60 per share dividend payable on January 3, 2014 to shareholders of record on December 16. The company had 500,000 shares authorized and 225,000 shares issued and outstanding.
The journal entry made on declaration date will include
a.a debit to Cash Dividends of €135,000.
b.a credit to Cash of €135,000.
c.a credit to Ordinary Share Dividends Distributable by €300,000.
d.No entry is made on the declaration date.
207.On December 1, 2013, the Board of directors of Dew Laurintis Company declared a €.60 per share dividend payable on January 3, 2014 to shareholders of record on December 16. The company had 500,000 shares authorized and 225,000 shares issued and outstanding.
The journal entry made on January 3, 2014 will
a.decrease assets and liabilities by €300,000.
b.increase assets and decrease equity by €135,000.
c.decrease assets and liabilities by €135,000.
d.decrease assets and increase equity by €135,000.
208.EI Toro Manufacturing Inc. declared a 20% share dividend when it had 150,000 ordinary shares (€5 par value) outstanding. The market price per share was €8 on the declaration date. The entry to record the dividend declaration included a credit to
a.Share Dividends of €240,000.
b.Share Premium–Ordinary for €210,000.
c.Share Capital–Ordinary for €240,000.
d.Ordinary Share Dividends Distributable €150,000.
209.Jacquet Wholesale Merchandise Inc. had 40,000 shares of 6%, CHF20 par value preference shares and 30,000 shares of CHF25 Par value ordinary shares outstanding throughout 2014.
Assuming that total dividends declared in 2014 were $70,000 and that preference shares are not cumulative, ordinary shareholders should receive total 2014 dividends of
a.CHF22,000.
b.CHF46,000.
c.CHF48,000.
d.CHF70,000.
210.Jacquet Wholesale Merchandise Inc. had 40,000 shares of 6%, CHF20 par value preference shares and 30,000 shares of CHF25 Par value ordinary shares outstanding throughout 2014.
Assuming that total dividends declared in 2014 were $184,000 and that the preference shares are cumulative with two years' dividends in arrears on December 31, 2014, the preference shareholders should receive total 2014 dividends totaling
a.CHF40,000.
b.CHF96,000.
c.CHF144,000.
d.CHF184,000.
211.Jacquet Wholesale Merchandise Inc. had 40,000 shares of 6%, CHF20 par value preference shares and 30,000 shares of CHF25 Par value ordinary shares outstanding throughout 2014.
Total dividends declared in 2014 were $70,000. The preference shares are cumulative. No dividends were paid in 2013. The ordinary shareholders should receive total 2014 dividends of
a.CHF0.
b.CHF22,000.
c.CHF48,000.
d.CHF96,000.
212.Jacquet Wholesale Merchandise Inc. had 40,000 shares of 6%, CHF20 par value preference shares and 30,000 shares of CHF25 Par value ordinary shares outstanding throughout 2014. These data apply to each of the independent situations below.
Total dividends declared in 2014 were $30,000. The preference shares are cumulative and no dividends were paid in 2012 or 2013. The amount of dividends in arrears at December 31, 2014 is
a.CHF18,000.
b.CHF96,000.
c.CHF114,000.
d.CHF144,000.
213.Assuming that there are no dividends in arrears, how are total dividends allocated between ordinary shares and preference shares?
a.Preference shareholders are paid their required annual dividend with the balance going to ordinary shareholders.
b.On the basis of their relative par values.
c.On the basis of their relative market values.
d.Cannot be determined with the information given.
214.If preference shares are non-cumulative,
a.preference shareholders will not receive dividends.
b.unpaid dividends become dividends in arrears.
c.unpaid dividends will never be paid.
d.the corporation has a liability for any unpaid dividends.
215.All of the following may decrease the retained earnings balance
except
a.net losses.
b.sale of treasury shares at less than cost.
c.cash dividends.
d.prior period adjustment for understatement of net income.