Question : 51. Which of the following entries would be recorded when a : 1228444

51. Which of the following entries would be recorded when a company reissues 1,000 shares of treasury stock for $40 per share when they were repurchased at a cost of $44 per share and have a $1 par value?
   
A. Option A
B. Option B
C. Option C
D. Option D

52. A company reported the following asset and liability balances at the end of 2009 and 2010:
  
During 2010, cash dividends of $50,000 were declared and paid, and common stock was issued for $100,000. How much was the 2010 net income? 
A. $400,000
B. $480,000
C. $350,000
D. $300,000

53. On December 15, 2009, the board of directors of Cross Corporation declared a cash dividend, payable on January 8, 2010 of $.80 per share on the 2,000,000 common shares outstanding. On December 15, 2009, Cross Corporation should 
A. not prepare a journal entry because the event had no effect on the corporation’s financial position until 2010.
B. decrease retained earnings $1.6 million and increase expenses $1.6 million.
C. decrease retained earnings $1.6 million and increase liabilities by $1.6 million.
D. decrease cash $1.6 million and decrease retained earnings $1.6 million.

54. The declaration and payment of a cash dividend 
A. reduces retained earnings and increases liabilities by the amount of the dividend.
B. reduces retained earnings and increases contributed capital by the same amount.
C. reduces assets and increases liabilities by the amount of the dividend.
D. reduces both assets and retained earnings by the amount of the dividend.

55. Which of the following correctly describes the affect of declaring and distributing a common stock dividend? 
A. Total stockholders’ equity decreases.
B. Total stockholders’ equity remains the same.
C. The number of shares outstanding increases while the par value of each share decreases.
D. The number of shares outstanding decreases while the par value of each share increases.

56. A stock dividend 
A. results in a transfer of retained earnings to contributed capital.
B. increases the number of shares outstanding and involves a pro rata reduction in the par value per share.
C. is accounted for in exactly the same manner as a stock split.
D. results in a transfer of retained earnings to contributed capital and also increases the number of shares outstanding and involves a pro rata reduction in the par value per share.

57. DORA Company declared and distributed a 10% stock dividend on 20,000 shares of issued and outstanding $5 par value common stock. The market price per share on the declaration date was $9 and was $10 on the distribution date. Which of the following correctly describes the accounting for the declaration and distribution of the stock dividend? 
A. Retained earnings decreased $20,000.
B. Capital in excess of par increased $10,000.
C. Common stock increased $18,000.
D. Retained earnings decreased $18,000.

58. Chicago Clock Corporation issued a 3-for-2 stock split of its common stock, which had a par value of $100 before the split. What dollar amount of retained earnings should be transferred to the common stock account? 
A. Par value of $100 per share.
B. Market value per share on the issue date.
C. Half of the previous total amount in the common stock account.
D. Retained earnings aren’t transferred to the common stock account.

59. Which of the following statements is false? 
A. Stock splits reallocate amounts between retained earnings and contributed capital accounts.
B. Both stock splits and stock dividends increase the common shares issued.
C. Both stock splits and stock dividends increase the common shares outstanding.
D. Both stock splits and stock dividends have the impact of reducing the market price of the stock.

60. A company has 4 million common shares authorized, 2.5 million shares issued and 100,000 treasury shares. The par value is $1 per share and the market price is $30 when the company declares a 4-for-1 stock split. Which of the following is correct? 
A. There will be a transfer of $2.4 million from retained earnings to contributed capital.
B. Only the shares outstanding will quadruple to 49.86 million and the par value will be reduced to $.25 per share.
C. The shares authorized, issued, outstanding, and held in treasury will all quadruple while the par value will be reduced to $.25 per share.
D. The company will be unable to declare a 4-for-1 split because they do not have enough authorized shares to issue the needed 49.86 million shares.