31. The par value of stock is an arbitrary per share amount defined in many states as legal capital.
32. When common stock is issued in exchange for land, the land should be recorded in the accounts at the par amount of the stock issued.
33. When a corporation issues stock at a premium, it reports the premium as an other income item on the income statement.
34. When no-par value stock does have a stated value, the entire proceeds from the issuance of the stock becomes legal capital in some states.
35. When no-par stock is issued, the Common Stock account is credited for the selling price of the stock issued.
36. A large retained earnings account means that there is cash available to pay dividends.
37. When the board of director's declares a cash or stock dividend, this action decreases Retained Earnings.
38. If 20,000 shares are authorized, 15,000 shares are issued, and 500 shares are held as treasury stock, a cash dividend of $1 per share would amount to $15,000.
39. Cash dividends are normally paid on shares of treasury stock.
40. The declaration of a cash dividend decreases a corporation's stockholders equity and decreases its assets.