Question : 55.Samuel Corporation declared and distributed a 10 percent stock dividend : 1169123

 

 

55.Samuel Corporation declared and distributed a 10 percent stock dividend on its $5 par common stock in November. 10,000 shares of common were authorized, 8,000 were issued and outstanding at the declaration. The market value on the date of declaration was $12 per share. The amount credited to Paid-in-Capital in Excess of Par Value-Common Stock is:   

A. $0.

 

B. $4,000.

 

C. $5,600.

 

D. $9,600.

 

 

 

56.A declaration and distribution of a 20 percent stock dividend on common stock will   

A. not change the total stockholders’ equity.

 

B. increase the assets of the corporation.

 

C. result in an increase in the book value of each share of common stock outstanding.

 

D. increase the liabilities of the corporation.

 

 

 

 

57.Which of the following statements is not correct?   

A. Book value for each share of stock is the total equity applicable to the class of stock dividend by the number of shares issued.

 

B. The total book value of a class of stock is increased after a stock dividend.

 

C. The total book value of a class of stock is decreased after a stock dividend.

 

D. All of these statements are correct. In theory, a stock dividend should result in a proportionate reduction in each share’s market value.

 

 

 

 

58.A corporation had 50,000 shares of $20 par value common stock outstanding on November 1 with no preferred stock issued or outstanding. The company’s retained earnings was $200,000 and total stockholders’ equity was $500,000. Later that day, the board declared a 10% stock dividend when the market value of each share was $25. Shortly after declaration, the market value fell to $22.50 per share. Sam Lewis owned 200 shares of stock prior to the declaration. After the stock dividend, the total book value of Lewis’ stock after receiving additional shares was:   

A. $1,000.

 

B. $2,000.

 

C. $4,500.

 

D. $5,000.

 

 

 

59.A corporation reported a net income of $90,000 for its fiscal year and declared and paid cash dividends of $60,000. A stock dividend recorded at $30,000 was also distributed during the year. If the beginning balance of the Retained Earnings account was $140,000, the ending balance is   

A. $230,000.

 

B. $170,000.

 

C. $140,000.

 

D. $130,000.

 

 

 

60.A corporation reported a net income of $120,000 for its fiscal year and declared and paid cash dividends of $50,000. A stock dividend recorded at $80,000 was also distributed during the year. If the beginning balance of the Retained Earnings account was $200,000, the ending balance is   

A. $170,000.

 

B. $190,000.

 

C. $200,000.

 

D. $270,000.

 

 

 

61.A corporation reported a net income of $120,000 for its fiscal year and declared and paid cash dividends of $60,000. A stock dividend recorded at $40,000 was also distributed during the year. If the ending balance of the Retained Earnings account was $200,000, the beginning balance was   

A. $160,000.

 

B. $180,000.

 

C. $200,000.

 

D. $220,000.

 

 

 

62.Aspen Corporation reported net income of $120,000 for its fiscal year and declared and paid cash dividends of $60,000 during the year. In November the 10,000 shares of $10 par, common stock split, 2 for 1. If the ending balance of the Retained Earnings prior to the split was $200,000, the beginning balance was   

A. $120,000.

 

B. $140,000.

 

C. $150,000.

 

D. $160,000.

 

 

 

63.Butler Corporation declared and issued a 10% stock dividend on December 1. Prior to the declaration, Butler’s retained earnings were $800,000, shares outstanding were 50,000, $5 par value, common stock with a current market value of $10 per share. Total stockholders’ equity will increase (decrease) as a result of recording this stock dividend by:   

A. $0.

 

B. $140,000.

 

C. $(25,000).

 

D. $(50,000).

 

 

 

64.Gender Corporation declared and issued a 10% stock dividend on December 1. Prior to the declaration, Gender’s retained earnings were $200,000, shares outstanding were 20,000, $5 par value, common stock with a current market value of $10 per share. Contributed capital will increase (decrease) as a result of recording this stock dividend by:   

A. $0.

 

B. $10,000.

 

C. $(10,000).

 

D. $20,000.