Question

Please provide answers.

5. The declaration and payment of cash dividends

a.reduces the amount of resources a company has to invest in productive assets.

b.sometimes does not reduce a company's cash balance.

c.sometimes does not reduce a company's retained earnings balance.

d.reduces a company's net income.

6. The declaration of a common cash dividend

a.decreases the number of shares of outstanding stock.

b.decreases a company's retained earnings balance.

c.decreases the amount of cash.

d.decreases the par value of outstanding stock.

7. When do cash dividends become liabilities?

a.On the payment date.

b.On the date of record.

c.On the declaration date.

d.Cash dividends are never liabilities because a company is not legally required to pay cash dividends.

8. Which of the following statements about retained earnings is true?

a.It is the amount of corporate earnings that have been reinvested in the business.

b.It is the amount of creditors' claims on assets.

c.It is increased when treasury stock is bought.

d.It is the amount of cash that has been retained from a company's earnings.

9. Which of the following is NOT an important date associated with dividends?

a.Declaration date

b.Dividend payment date

c.Date of record

d.Date of information

10. During the year, Trenton Company purchased 3,000 shares of its $10 par common stock at $50 per share and later sold it for $40 per share. How much did total equity change because of these treasury stock transactions?

a.$150,000 decrease

b.$120,000 increase

c.$20,000 decrease

d.$30,000 decrease

11. Moony Corporation had 20,000 shares of $4 par-value common stock outstanding on January 1, 2018. On January 10, 2018, the firm purchased 2,000 of its outstanding shares for $18 per share. On July 22, 2018, it reissued 1,000 shares at $22 per share. Given this information, the entry to record the reissuing of the remaining 1,000 shares on August 17, 2018, at $12 per share would probably include a

a.credit to treasury stock of $4,000.

b.debit to paid-in capital, treasury stock of $6,000.

c.debit to loss on sale of stock of $6,000.

d.debit to retained earnings of $2,000.

12. Moony Corporation had 20,000 shares of $4 par-value common stock outstanding on January 1, 2018. On January 10, 2018, the firm purchased 2,000 of its outstanding shares for $18 per share. On July 22, 2018, it reissued 1,000 shares at $22 per share. Given this information, the entry to record the reissuance of the stock on July 22 would include a credit to

a.paid-in capital, treasury stock of $4,000.

b.common stock of $4,000.

c.paid-in capital, $18,000.

d.treasury stock of $4,000.

13. Moony Corporation had 20,000 shares of $4 par-value common stock outstanding on January 1, 2018. On January 10, 2018, the firm purchased 2,000 of its outstanding shares for $18 per share. On July 22, 2018, it reissued 1,000 shares at $22 per share. Given this information, the entry to record the purchase of this stock on January 10 would include a debit to

a.treasury Stock of $8,000.

b.treasury Stock of $36,000.

c.common Stock of $8,000.

d.common Stock of $36,000.

14. At the beginning of the year, Brandt Company issued 5,000 shares of $1 par common stock in exchange for land with a book value of $130,000 and a fair value of $100,000. The market value of the stock at the date of the transaction was $20 per share. The entry to record this transaction would include a

a.credit to common stock for $100,000.

b.debit to common stock for $5,000.

c.credit to paid-in capital in excess of par, common stock of $95,000.

d.debit to land of $130,000.

15. At the beginning of the year, Salina Company issued 10,000 shares of no par common stock for $100 each. The journal entry to record this transaction would include a

a.credit to common stock of $1,000,000.

b.credit to cash of $1,000,000.

c.debit to common stock of $1,000,000.

d.debit to cash of $20,000.

16. On January 1, 2018, Georgi Company was authorized to issue 10,000 shares of $2 par common stock and 5,000 shares of $5 par preferred stock. Given this information, if Georgi Company issued 2,000 shares of preferred stock for $20 per share on January 31, 2018, the entry to record the issuance of the stock would include a

a.credit to preferred stock of $40,000.

b.credit to paid-in capital in excess of par, preferred stock of $10,000.

c.debit to cash of $30,000.

d.debit to cash of $40,000.

Answer 1

5. The declaration and payment of cash dividends

a.reduces the amount of resources a company has to invest in productive assets.

6. The declaration of a common cash dividend

b.decreases a company's retained earnings balance.

7. When do cash dividends become liabilities?

c.On the declaration date.

8. Which of the following statements about retained earnings is true?

a.It is the amount of corporate earnings that have been reinvested in the business.

9. Which of the following is NOT an important date associated with dividends?

d.Date of information

10. During the year, Trenton Company purchased 3,000 shares of its $10 par common stock at $50 per share and later sold it for $40 per share. How much did total equity change because of these treasury stock transactions?

d.$30,000 decrease

11. Moony Corporation had 20,000 shares of $4 par-value common stock outstanding on January 1, 2018. On January 10, 2018, the firm purchased 2,000 of its outstanding shares for $18 per share. On July 22, 2018, it reissued 1,000 shares at $22 per share. Given this information, the entry to record the reissuing of the remaining 1,000 shares on August 17, 2018, at $12 per share would probably include a

c.debit to loss on sale of stock of $6,000.

12. Moony Corporation had 20,000 shares of $4 par-value common stock outstanding on January 1, 2018. On January 10, 2018, the firm purchased 2,000 of its outstanding shares for $18 per share. On July 22, 2018, it reissued 1,000 shares at $22 per share. Given this information, the entry to record the reissuance of the stock on July 22 would include a credit to

a.paid-in capital, treasury stock of $4,000.

13. Moony Corporation had 20,000 shares of $4 par-value common stock outstanding on January 1, 2018. On January 10, 2018, the firm purchased 2,000 of its outstanding shares for $18 per share. On July 22, 2018, it reissued 1,000 shares at $22 per share. Given this information, the entry to record the purchase of this stock on January 10 would include a debit to

a.treasury Stock of $8,000.

14. At the beginning of the year, Brandt Company issued 5,000 shares of $1 par common stock in exchange for land with a book value of $130,000 and a fair value of $100,000. The market value of the stock at the date of the transaction was $20 per share. The entry to record this transaction would include a

c.credit to paid-in capital in excess of par, common stock of $95,000.

15. At the beginning of the year, Salina Company issued 10,000 shares of no par common stock for $100 each. The journal entry to record this transaction would include a

a.credit to common stock of $1,000,000.

16. On January 1, 2018, Georgi Company was authorized to issue 10,000 shares of $2 par common stock and 5,000 shares of $5 par preferred stock. Given this information, if Georgi Company issued 2,000 shares of preferred stock for $20 per share on January 31, 2018, the entry to record the issuance of the stock would include a

d.debit to cash of $40,000.