Question :
41. The entry to record the declaration of a cash dividend : 1197682
41. The entry to record the declaration of a cash dividend consists of a debit to
A. Dividend Expense and a credit to Cash.
B. Retained Earnings and a credit to Common Stock Dividend Distributable.
C. Dividends Payable and a credit to Retained Earnings.
D. Retained Earnings and a credit to Dividends Payable.
42. A liability for the payment of cash dividends is recorded
A. on the date the board of directors publicly declares its intention to pay the dividends.
B. only when cumulative preferred dividends are passed over (not paid) and are in arrears.
C. at the end of any year during which common stock dividends were not paid.
D. at the end of every year that the corporation makes a profit.
43. 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.
44. 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.
45. 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 is
A. $160,000.
B. $180,000.
C. $200,000.
D. $220,000.
46. Total stockholders’ equity would be decreased by
A. a stock split.
B. an appropriation of retained earnings.
C. a cash dividend.
D. a stock dividend.
47. 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.
48. 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 the above statements are correct. In theory, a stock dividend should result in a proportionate reduction in each share’s market value.
49. Which of the following statements is correct?
A. The Common Stock Dividends Distributable account is shown as a current liability on the balance sheet.
B. When a stock dividend is distributed, no assets leave or enter the corporation.
C. When a stock dividend is declared, the total amount debited to Retained Earnings is the par value, or stated value, of the shares to be issued.
D. When a stock dividend is declared, the total amount of the dividend is debited to the Common Stock account.
50. Which of the following statements is not correct?
A. The entry to record the appropriation of retained earnings for warehouse construction includes a debit to Retained Earnings.
B. Appropriated retained earnings are listed separately on the balance sheet.
C. When retained earnings are appropriated, cash is set aside for a specific purpose.
D. Dividends cannot be declared from appropriated retained earnings.
