Question : 31) When a stock dividend received, the stockholder would: A) own : 1230036

 

31) When a stock dividend is received, the stockholder would:

A) own more shares of stock.

B) anticipate the par value of the stock to increase.

C) expect the market price per share to increase.

D) expect retained earnings to decrease.

 

32) A stock dividend is considered small when it is a dividend of:

A) less than 30% bur greater than 25% of the corporation’s issued stock.

B) between 50% and 100% of the corporation’s issued stock.

C) more than 30% of the corporation’s issued stock.

D) 25% or less of the corporation’s issued stock.

 

33) The per share amount usually given to a large stock dividend is:

A) the average per share price of outstanding stock.

B) the par value of the stock.

C) the current market value of the stock.

D) zero, since the stockholder is not receiving cash.

 

34) A small stock dividend will:

A) reduce total assets.

B) reduce total owners’ equity.

C) increase total owners’ equity.

D) have no effect on total assets or total owners’ equity.

35) Fortune, Inc. declares a 10% common stock dividend when it has 20,000 shares of $10 par value common stock outstanding. If the market value of the common stock is $25, the journal entry to record the stock dividend would include a:

A) debit to Retained Earnings $50,000.

B) debit to Retained Earnings $20,000.

C) credit to Paid-in Capital in Excess of Par Value $50,000.

D) credit to Paid-in Capital in Excess of Par Value $20,000

 

36) Fortune, Inc. declares a 10% common stock dividend when it has 20,000 shares of $10 par value common stock outstanding. If the market value of the common stock is $25, the journal entry to record the stock dividend would include a:

A) credit to Common Stock $50,000.

B) credit to Common Stock $20,000.

C) credit to Paid-in Capital in Excess of Par Value $30,000.

D) credit to Paid-in Capital in Excess of Par Value $20,000

 

37) Wildcat, Inc. declared a 10% stock dividend when it had 150,000 shares of $1 par value common stock outstanding. The market price per share of common stock was $10 per share when the dividend was declared. The entry to record the stock dividend would include a credit to:

A) Retained Earnings $150,000.

B) Paid-in Capital in Excess of Par $135,000.

C) Common Stock $150,000.

D) Retained Earnings $15,000.

 

38) An increase in the number of authorized, issued and outstanding shares of stock along with a proportional reduction in the stock’s par value is a:

A) deficit.

B) stock dividend.

C) stock split.

D) cash dividend.

39) A stock split:

A) increases Assets and decreases Stockholders’ Equity.

B) decreases Assets and increases Stockholders’ Equity.

C) increases Common Stock and decreases Paid-in Capital.

D) has no effect on total equity.

 

40) On November 24th, B & B Corporation declared a $0.40 per share cash dividend. The dividend will be payable on December 12th to the stockholders of record as of December 5th. B&B Corporation has 25,500 shares of $1 par value common stock outstanding on November 24th. On December 12th, B& B had 30,000 shares of $1 par value common stock outstanding. Prepare the journal entries on the declaration and payment dates.

 

 

 

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