71. On September 1, a corporation had 50,000 shares of $5 par value common stock and $1,000,000 of retained earnings. On that date, when the market price of the stock is $15 per share, the corporation...

71. On September 1, a corporation had 50,000 shares of $5 par value common stock and $1,000,000 of retained earnings. On that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. The general journal entry to record this transaction is:

A.

B.

C.

D.

E. No entry is made for this transaction.

72. A corporation declared and issued a 15% stock dividend on November 1. The following up-to-date information was available immediately prior to the dividend:

The amount that total stockholders' equity will increase (decrease) as a result of recording this stock dividend is:

A. $45,000
B. $135,000
C. $(90,000)
D. $(135,000)
E. $0

73. A corporation had 50,000 shares of $20 par value common stock outstanding on July 1. Later that day the board of directors declared a 10% stock dividend when the market value of each share was $27. The entry to record this dividend is:

A.

B.

C.

D.

E. No entry is made until the stock is issued

74. A corporation had 20,000 shares of $10 par value common stock outstanding on January 10. Later that day the board of directors declared a 30% stock dividend when the market value of each share was $40. The entry to record this dividend is:

A.

B.

C.

D.

E. No entry is made until the stock is issued

75. A corporation had 40,000 shares of $10 par value common stock outstanding on August 1. Later that day, the board of directors declared a 9% stock dividend when the market value of each share was $72. The entry to record this dividend is:

A.

B.

C.

D.

E. No entry is made until the stock is issued

76. Preferred stock on which the right to receive dividends is forfeited for any year that the dividends are not declared is called:

A. Noncumulative preferred stock
B. Participating preferred stock
C. Callable preferred stock
D. Cumulative preferred stock
E. Convertible preferred stock

77. Preferred stock that the issuing corporation at its option may retire by paying a specified amount to the preferred stockholders plus any dividends in arrears is called:

A. Convertible preferred stock
B. Callable preferred stock
C. Premium stock
D. Cumulative preferred stock
E. Participating preferred stock

78. Achieving an increased return on common stock by paying dividends on preferred stock at a rate that is less than the rate of return earned with the assets invested from the preferred stock issuance is called:

A. Financial leverage
B. Discount on stock
C. Premium on stock
D. Preemptive right
E. Capital gain

79. Preferred stock with a feature allowing preferred stockholders to share with common shareholders in any dividends in excess of the percent or dollar amount stated on the preferred stock is called:

A. Cumulative preferred stock
B. Callable preferred stock
C. Participating preferred stock
D. Convertible preferred stock
E. Preferential preferred stock

80. Xtreme Sports has $100,000 par, 8% noncumulative, nonparticipating, preferred stock outstanding. Xtreme Sports also has $500,000 par common stock outstanding. In the company's first year of operation, no dividends were paid. During the second year, Xtreme Sports paid cash dividends of $30,000. This dividend should be distributed as follows:

A. $8,000 preferred; $22,000 common.
B. $16,000 preferred; $14,000 common.
C. $7,500 preferred; $22,500 common.
D. $15,000 preferred; $15,000 common.
E. $0 preferred; $30,000 common.