91.At the beginning of the current year, Elite Corporation had 200,000 shares of $1 par common stock outstanding and had retained earnings of $4,800,000. During the year, the company earned $1,675,000, declared a 10% stock dividend when the price of stock was $28 per share, and paid a year-end cash dividend of $3 per share. (The cash dividend was paid after the stock dividend had been distributed.) What was Elite Corporation’s retained earnings at the end of the year?
A. $5,915,000.
B. $5,255,000.
C. $5,311,000.
D. $3,580,000.
$4,800,000 + $1,675,000 – (20,000 × $28) – (220,000 × $3) = $5,255,000
92.At the beginning of the current year, Wilson Corporation had 200,000 shares of $1 par common stock outstanding and had retained earnings of $4,800,000. During the year, the company earned $1,675,000 and paid a year-end cash dividend of $3 per share. What was Wilson Corporation’s retained earnings at the end of the year?
A. $6,275,000.
B. $5,875,000.
C. $6,475,000.
D. $4,800,000.
$4,800,000 + $1,675,000 – (200,000 × $3) = $5,875,000
93.On January 31, Village Bank had 500,000 shares of $3 par value common stock outstanding. On that date, the company declared a 10% stock dividend when the market price of the stock was $62 per share. The immediate effect of this dividend upon Village Bank was:
A. A reduction in cash of $3,794,500.
B. A reduction in retained earnings of $3,100,000.
C. A reduction in retained earnings of $150,000.
D. A liability to the stockholders of $150,000.
$62(500,000 × .10) = $3,100,000
94.Which of the following items would not reduce retained earnings?
A. A common stock dividend.
B. A preferred stock dividend.
C. A cash dividend.
D. Cash payment of a previously declared dividend.
The stockholders’ equity section of the balance sheet of Caesar Corporation at December 31, 2015, appears as follows: (The company engaged in no treasury stock transactions prior to 2015)
95.Refer to the information above. What was the original cost of the treasury stock to Caesar Corporation?
A. $5 per share.
B. $7 per share.
C. $8 per share.
D. Cannot be determined.
$40,000/5,000 = $8
96.Refer to the information above. What was the average issue price per share of preferred stock?
A. $100.
B. $110.
C. $115.
D. $5.
($800,000/8,000) + ($80,000/8,000) = $110
97.Refer to the information above. How many shares of common stock are outstanding?
A. 100,000.
B. 95,000.
C. 75,000.
D. 70,000.
75,000 – 5,000 = 70,000
98.Refer to the information above. A small stock dividend of 1,000 shares was declared and distributed during 2015. What was the market price per share on the date of declaration?
A. $8.00 per share.
B. $2 per share.
C. $16 per share.
D. $28.00 per share.
(1,000 × $2 + $26,000)/1,000 = $28.00
99.Refer to the information above. If Caesar Corporation had reacquired 7,000 shares of treasury stock early in 2015, then some treasury stock must have been sold during 2015 for:
A. $8 per share.
B. $12.00 per share.
C. $1.50 per share.
D. $5 per share.
($40,000/5,000) + $8,000/2,000 = $12.00
100.Refer to the information above. Assume that all remaining treasury stock is reissued at a price of $14 per share in January of 2016. What amount should be credited to the account Additional Paid-In Capital: Treasury Stock Transactions in the journal entry to record this transaction?
A. $14,000.
B. $30,000.
C. $40,000.
D. $70,000.
(5,000 × $14) – $40,000 = $30,000
The stockholders’ equity section of the balance sheet of Crammond Corporation at December 31, appears as follows:
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