71. On September 1, a corporation had 50,000 shares of $5 par value common stock and $1,000,000 of retained earnings. On that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. The general journal entry to record this transaction is:
A.
Retained Earnings
750,000
Common Stock Split Distributable
750,000
B.
Retained Earnings
750,000
Common Stock
750,000
C.
Retained Earnings
250,000
Common Stock
250,000
D.
Retained Earnings
250,000
Stock split payable
250,000
E. No entry is made for this transaction.
72. A corporation declared and issued a 15% stock dividend on November 1. The following up-to-date information was available immediately prior to the dividend:
Retained earnings
$750,000
Shares issued and outstanding
60,000
Market value per share
$15
Par value per share
$5
The amount that total stockholders’ equity will increase (decrease) as a result of recording this stock dividend is: A. $45,000B. $135,000C. $(90,000)D. $(135,000)E. $0
73. A corporation had 50,000 shares of $20 par value common stock outstanding on July 1. Later that day the board of directors declared a 10% stock dividend when the market value of each share was $27. The entry to record this dividend is:
A.
Retained Earnings
135,000
Common Stock Dividend Distributable
135,000
B.
Retained Earnings
135,000
Cash
135,000
C.
Retained Earnings
135,000
Common Stock Dividend Distributable
100,000
Paid-In Capital in Excess of Par Value,
Common Stock
35,000
D.
Retained Earnings
100,000
Common Stock Dividend Distributable
100,000
E. No entry is made until the stock is issued
74. A corporation had 20,000 shares of $10 par value common stock outstanding on January 10. Later that day the board of directors declared a 30% stock dividend when the market value of each share was $40. The entry to record this dividend is:
A.
Retained Earnings
60,000
Common Stock Dividend Distributable
60,000
B.
Retained Earnings
60,000
Cash
60,000
C.
Retained Earnings
240,000
Common Stock Dividend Distributable
60,000
Paid-In Capital in Excess of Par Value,
Common Stock
180,000
D.
Retained Earnings
240,000
Common Stock Dividend Distributable
240,000
E. No entry is made until the stock is issued
75. A corporation had 40,000 shares of $10 par value common stock outstanding on August 1. Later that day, the board of directors declared a 9% stock dividend when the market value of each share was $72. The entry to record this dividend is:
A.
Common Stock Dividend Distributable
259,200
Retained Earnings
259,200
B.
Retained Earnings
259,200
Common Stock Dividend Distributable
259,200
C.
Retained Earnings
259,200
Common Stock Dividend Distributable
36,000
Paid-In Capital in Excess of Par Value,
Common Stock
223,200
D.
Retained Earnings
36,000
Common Stock Dividend Distributable
36,000
E. No entry is made until the stock is issued
76. Preferred stock on which the right to receive dividends is forfeited for any year that the dividends are not declared is called: A. Noncumulative preferred stockB. Participating preferred stockC. Callable preferred stockD. Cumulative preferred stockE. Convertible preferred stock
77. Preferred stock that the issuing corporation at its option may retire by paying a specified amount to the preferred stockholders plus any dividends in arrears is called: A. Convertible preferred stockB. Callable preferred stockC. Premium stockD. Cumulative preferred stockE. Participating preferred stock
78. Achieving an increased return on common stock by paying dividends on preferred stock at a rate that is less than the rate of return earned with the assets invested from the preferred stock issuance is called: A. Financial leverageB. Discount on stockC. Premium on stockD. Preemptive rightE. Capital gain
79. Preferred stock with a feature allowing preferred stockholders to share with common shareholders in any dividends in excess of the percent or dollar amount stated on the preferred stock is called: A. Cumulative preferred stockB. Callable preferred stockC. Participating preferred stockD. Convertible preferred stockE. Preferential preferred stock
80. Xtreme Sports has $100,000 par, 8% noncumulative, nonparticipating, preferred stock outstanding. Xtreme Sports also has $500,000 par common stock outstanding. In the company’s first year of operation, no dividends were paid. During the second year, Xtreme Sports paid cash dividends of $30,000. This dividend should be distributed as follows: A. $8,000 preferred; $22,000 common.B. $16,000 preferred; $14,000 common.C. $7,500 preferred; $22,500 common.D. $15,000 preferred; $15,000 common.E. $0 preferred; $30,000 common.
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