95. Retained Earnings:
a. Has a normal debit balance.
b. Decreases stockholders’ equity.
c. Is equal to the balance in cash.
d. Increases stockholders’ equity.
96. Journal entries to record cash dividends are made on the:
a. Declaration date, record date, and payment date.
b. Record date and payment date.
c. Delaration date and payment date.
d. Delaration date and record date.
97. The board of directors of Capstone Inc. declared a $0.60 per share cash dividend on its $1 par common stock. On the date of declaration, there were 50,000 shares authorized, 20,000 shares issued, and 5,000 shares held as treasury stock. What is the entry when the dividends are declared?
a.
|
Dividends
|
9,000
|
|
|
Dividends Payable
|
|
9,000
|
b.
|
Dividends
|
9,000
|
|
|
Cash
|
|
9,000
|
c.
|
Dividends
|
12,000
|
|
|
Dividends Payable
|
|
12,000
|
d.
|
Dividends
|
12,000
|
|
|
Cash
|
|
12,000
|
98. The board of directors of Capstone Inc. declared a $0.60 per share cash dividend on its $1 par common stock. On the date of declaration, there were 50,000 shares authorized, 20,000 shares issued, and 5,000 shares held as treasury stock. Assuming the dividends were declared on June 1, what is the entry on June 30 to record the payment of cash dividends?
a.
|
Dividends
|
9,000
|
|
|
Dividends Payable
|
|
9,000
|
b.
|
Dividends Payable
|
9,000
|
|
|
Cash
|
|
9,000
|
c.
|
Dividends
|
12,000
|
|
|
Dividends Payable
|
|
12,000
|
d.
|
Dividends Payable
|
12,000
|
|
|
Cash
|
|
12,000
|
99. The ending Retained Earnings balance of Lambert Inc. increased by $1.5 million from the beginning of the year. The company’s net income earned during the year is $3.5 million. What is the amount of dividends Lambert Inc. declared and paid?
a.
|
$1.5 million.
|
b.
|
$3.5 million.
|
c.
|
$2.0 million.
|
d.
|
$5.0 million.
|
100. Over the first four years of the company’s life, it earned the following net income (loss): $6,000; $3,000; $6,000, and ($2,000). If the company’s ending retained earnings is $10,000 after year 4, what is the
average
amount of dividends paid per year?
a.
|
$3,000.
|
b.
|
$7,000.
|
c.
|
$0.
|
d.
|
$750.
|
101. Fashion, Inc. had a Retained Earnings balance of $12,000 at December 31, 2015. The company had an average income of $7,500 over the next 3 years, and an ending Retained Earnings balance of $15,000 at December 31, 2016. What was the
total
amount of dividends paid over the last three years?
a.
|
$4,500.
|
b.
|
$6,500.
|
c.
|
$19,500.
|
d.
|
$27,000.
|
102. Both cash dividends and stock dividends:
a. Reduce total assets.
b. Reduce total liabilities.
c. Reduce total stockholders' equity.
d. Reduce retained earnings.
103. The declaration and issuance of a stock dividend:
a.Does not change total assets, liabilities, or total stockholders’ equity.
b.Decreases total stockholders’ equity and increases common stock.
c.Decreases assets and decreases total stockholders’ equity.
d.Does not change retained earnings or paid-in capital.
104. The issuer of a 100% common stock dividend (large stock dividend) to common stockholders should debit stock dividends for an amount equal to the
|
a.
|
Book value of the shares issued.
|
b.
|
Par value of the shares issued.
|
c.
|
Market value of the shares issued.
|
d.
|
Minimum legal requirements.
|
|
|
105. The issuer of a 5% common stock dividend (small stock dividend) to common stockholders should debit stock dividends for an amount equal to the
|
a.
|
Book value of the shares issued.
|
b.
|
Par or stated value of the shares issued.
|
c.
|
Market value of the shares issued.
|
d.
|
Minimum legal requirements.
|
|
|
106. A feature common to both stock splits and stock dividends is
|
a.
|
That there is no effect on total stockholders' equity.
|
b.
|
A reduction in the contributed capital of a corporation.
|
c.
|
A transfer to earned capital of a corporation.
|
d.
|
An increase in total liabilities of a corporation.
|
|
|
107. Large stock dividends and stock splits are issued primarily to:
a.Lower the trading price of the stock per share.
b.Increase the number of authorized shares.
c.Increase legal capital.
d.Increase the number of outstanding shares.
108. The Common Stock account on a company's balance sheet is measured as:
a.The number of common shares outstanding x the stock's par value per share.
b.The number of common shares outstanding x the stock's current market value per share.
c.The number of common shares issued x the stock's par value per share.
d.The number of common shares issued x the stock's current market value per share.
109. The stockholders’ equity section in the balance sheet shows:
a. The ending balance in each stockholders’ equity account.
b. How each equity account changed over time.
c. The average balance in each stockholders’ equity account.
d. More information than the statement of stockholders’ equity.
110. The statement of stockholders’ equity shows:
a. Only the ending balance in each stockholders’ equity account.
b. How each equity account changed over time.
c. Only the beginning balance in each stockholders’ equity account.
d. Less information than the stockholders’ equity section in the balance sheet.
111. How does the stockholders’ equity section in the balance sheet differ from the statement of stockholders’ equity?
a. The stockholders’ equity section is more detailed than the statement of stockholders’ equity.
b. The stockholders' equity section shows balances at a point in time, whereas the statement of stockholders' equity shows activity over a period of time.
c. The stockholders' equity section shows activity over a period of time, whereas the statement of stockholders' equity is at a point time.
d. There are no differences between them.
112. Clothing Emporium was organized on January 1, 2015. The firm was authorized to issue 100,000 shares of $5 par value common stock. During 2015, Clothing Emporium had the following transactions relating to shareholders' equity:
Issued 30,000 shares of common stock at $7 per share.
Issued 20,000 shares of common stock at $8 per share.
Reported a net income of $100,000.
Paid dividends of $50,000.
What is the total stockholders’ equity at the end of 2015?
a.$420,000.
b.$370,000.
c.$470,000.
d.$250,000.
113. Clothing Emporium was organized on January 1, 2015. The firm was authorized to issue 100,000 shares of $5 par value common stock. During 2015, Clothing Emporium had the following transactions relating to shareholders' equity:
Issued 30,000 shares of common stock at $7 per share.
Issued 20,000 shares of common stock at $8 per share.
Reported a net income of $100,000.
Paid dividends of $50,000.
What is the total amount recorded in the Common Stock account at the end of 2015?
a.$420,000.
b.$370,000.
c.$470,000.
d.$250,000.
114. Clothing Emporium was organized on January 1, 2015. The firm was authorized to issue 100,000 shares of $5 par value common stock. During 2015, Clothing Emporium had the following transactions relating to shareholders' equity:
Issued 30,000 shares of common stock at $7 per share.
Issued 20,000 shares of common stock at $8 per share.
Reported a net income of $100,000.
Paid dividends of $50,000.
What is total paid-in capital at the end of 2015?
a.$420,000.
b.$370,000.
c.$470,000.
d.$320,000.