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1.Sweet Company’s outstanding stock consists of 2,000 shares of cumulative 4% preferred stock with a $100...

1.Sweet Company’s outstanding stock consists of 2,000 shares of cumulative 4% preferred stock with a $100 par value and 11,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.

Dividend Declared

Year 1 $ 3,000

Year 2 $ 7,000

Year 3 $ 37,000

The total amount of dividends paid to preferred and common shareholders over the three-year period is:

Multiple Choice

A.$24,000 preferred; $23,000 common.
B.$15,000 preferred; $32,000 common.
C.$8,000 preferred; $39,000 common.
D.$19,000 preferred; $28,000 common.
E.$16,000 preferred; $31,000 common.

2.Torino Company has 2,400 shares of $10 par value, 4.5% cumulative and nonparticipating preferred stock and 24,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $500 in its first year of operation. The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:

Multiple Choice

A.$1,660.
B.$580.

C.$2,160.

D$1,080.
E.$500.

3.Global Corporation had 41,000 shares of $20 par value common stock outstanding on July 1. Later that day the board of directors declared a 25% stock dividend when the market value of each share was $25. The entry to record the dividend declaration is:

Multiple Choice

A.Debit Retained Earnings $205,000; credit Common Stock Dividend Distributable $205,000.

B.Debit Retained Earnings $256,250; credit Common Stock Dividend Distributable $256,250.

C.Debit Retained Earnings $256,250; credit Common Stock Dividend Distributable $205,000; credit Paid-In Capital in Excess of Par Value, Common Stock $51,250.

D.Debit Retained Earnings $256,250; credit Cash $256,250.

E.No entry is made until the stock is issued.

4.A corporation issued 5,700 shares of $10 par value common stock in exchange for some land with a market value of $84,000. The entry to record this exchange is:

A.Debit Land $84,000; credit Common Stock $57,000; credit Paid-In Capital in Excess of Par Value, Common Stock $27,000.

B.Debit Land $84,000; credit Common Stock $84,000.

C.Debit Land $57,000; credit Common Stock $57,000.

D.Debit Common Stock $57,000; debit Paid-In Capital in Excess of Par Value, Common Stock $27,000; credit Land $84,000.

E.Debit Common Stock $84,000; credit Land $84,000.

5.A corporation declared and issued a 20% stock dividend on October 1. The following information was available immediately prior to the dividend:

Retained earnings $ 690,000

Shares issued and outstanding 54,000

Market value per share $ 21

Par value per share $ 5

The amount that contributed capital will increase (decrease) as a result of recording this stock dividend is:

Multiple Choice

A.$54,000.

B.$(54,000).

C.$0.

D.$226,800.

E.$(226,800).

Solutions

Expert Solution

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ekkarill92 answered 3 weeks ago

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