121. Treasury stock should be reported in the financial statements of a corporation as a(n)
A. investment.
B. liability.
C. current asset.
D. deduction from stockholders’s equity.
122. The reduction of par or stated value of stock by issuance of a proportionate number of additional shares is termed a
A. liquidating dividend
B. stock split
C. stock option
D. preferred dividend
123. A corporation has 50,000 shares of $25 par value stock outstanding. If the corporation issues a 3-for-1 stock split, the number of shares outstanding after the split will be
A. 150,000 shares
B. 50,000 shares
C. 100,000 shares
D. 16,666 shares
124. When a corporation completes a 3-for-1 stock split
A. the ownership interest of current stockholders is decreased
B. the market price per share of the stock is decreased
C. the par value per share is decreased
D. b and c
125. A corporation has 50,000 shares of $28 par value stock outstanding that has a current market value of $150. If the corporation issues a 4-for-1 stock split, the market value of the stock will fall to approximately
A. $7.00
B. $112.00
C. $37.50
D. $600.00
126. The primary purpose of a stock split is to
A. increase paid-in capital
B. reduce the market price of the stock per share
C. increase the market price of the stock per share
D. increase retained earnings
127. A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8. Subsequently, the company declared a 2% stock dividend on a date when the market price was $11 a share. What is the amount transferred from the retained earnings account to paid-in capital accounts as a result of the stock dividend?
A. $3,200
B. $6,400
C. $4,800
D. $8,800
128. A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9. Subsequently, the company declared a 2% stock dividend on a date when the market price was $10 a share. The effect of the declaration and issuance of the stock dividend is to
A. decrease retained earnings, increase common stock, and increase paid-in capital
B. increase retained earnings, decrease common stock, and decrease paid-in capital
C. increase retained earnings, decrease common stock, and increase paid-in capital
D. decrease retained earnings, increase common stock, and decrease paid-in capital
129. A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8. Subsequently, the company declared a 4% stock dividend on a date when the market price was $12 a share. What is the amount transferred from the Retained Earnings account to Paid-in Capital accounts as a result of the stock dividend?
A. $12,800
B. $19,200
C. $32,000
D. $48,800
130. Which of the following statements is not true about a 2-for-1 split?
A. Par value per share is reduced to half of what it was before the split.
B. Total contributed capital increases.
C. The market price will probably decrease.
D. A stockholder with ten shares before the split owns twenty shares after the split.
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