Question : 45. After a corporation declares a cash dividend, what takes place : 1224814

45. After a corporation declares a cash dividend, what takes place on the date of record? 
A. Cash decreases.
B. Liabilities decrease.
C. Equity decreases.
D. No entry is necessary.

46. When a corporation pays a previously declared cash dividend, which of the following is true? 
A. Cash increases.
B. Liabilities decrease.
C. Equity decreases.
D. No entry is necessary.

47. When a corporation declares a stock dividend, which of the following is true? 
A. Cash decreases.
B. Equity remains the same.
C. Equity decreases.
D. Retained earnings increases.

48. When a corporation declares a small stock dividend, which of the following is false? 
A. Cash decreases.
B. Total stockholders’ equity remains the same.
C. The capital stock accounts increase.
D. Retained earnings decreases.

49. On June 1, 2011, Donner Technologies declared a $50,000 cash dividend to be distributed to its common stockholders of record on June 15, 2011. The dividend will be paid on July 1, 2011. The required journal entry on June 1 includes a: 
A. $50,000 debit to retained earnings.
B. $50,000 debit to dividends payable.
C. $50,000 credit to cash.
D. $50,000 credit to common stock.

50. On January 15, 2011, Rockney Systems, Inc. paid a cash dividend that had been declared prior to the end of its 2010 fiscal year. The entry to pay the dividends includes a debit to: 
A. Cash and a credit to Dividends Payable.
B. Dividends Payable and a credit to Cash.
C. Retained Earnings and a credit to Dividends Payable.
D. Dividends Payable and a credit to Retained Earnings.

51. When is a liability for cash dividends created? 
A. At the end of each fiscal year.
B. At the date of declaration.
C. At the date of record.
D. At the date of payment.

52. Which of the following is the appropriate general journal entry to record the declaration of a cash dividends? 
A. Retained Earnings
             Cash
B. Dividends Payable
            Cash
C. Additional Paid-in Capital
            Dividends Payable
D. Retained Earnings
            Dividends Payable

53. What is the primary reason for a stock split? 
A. To distribute cash to the investor.
B. To decrease the market value of the stock.
C. To decrease the number of shares outstanding.
D. To increase the capital stock of the corporation.

54. The stockholders’ equity section of the December 31, 2011, balance sheet for Inglenook Interiors, Inc. before its recent stock dividend:
 

Common stock, $5 par, 100,000 shares issued and outstanding

$   500,000

Additional paid-in capital

100,000

Retained earnings

725,000

Total stockholders’ equity

$1,325,000

Inglenook declared a 10% stock dividend when the market price per share was $8.00. After the stock dividend, the components of Inglenook’s stockholders’ equity section were:

    Common Stock   Paid-in Capital   Retained Earnings 
A. $580,000               $100,000             $645,000
B. $550,000               $100,000             $805,000
C. $580,000               $130,000             $805,000
D. $550,000               $130,000             $645,000