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FT - Evaluation Quiz 2.1

1) Entries are made on the date of declaration, date of record, and date of payment for dividends. Cash dividends are paid based on shares outstanding less treasury shares. 2) The statement that is not true about property dividends is that the accounting should be based on carrying value. All other statements are true. 3) A journal entry for a liquidating dividend declared by a mining company must include a debit to Retained Earnings.

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LLYOD FRANCIS LAYLAY
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215 views3 pages

FT - Evaluation Quiz 2.1

1) Entries are made on the date of declaration, date of record, and date of payment for dividends. Cash dividends are paid based on shares outstanding less treasury shares. 2) The statement that is not true about property dividends is that the accounting should be based on carrying value. All other statements are true. 3) A journal entry for a liquidating dividend declared by a mining company must include a debit to Retained Earnings.

Uploaded by

LLYOD FRANCIS LAYLAY
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as TXT, PDF, TXT or read online on Scribd
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An entry is not made on the

date of declaration.
date of record.
date of payment.
An entry is made on all of these dates.

Cash dividends are paid on the basis of the number of shares

authorized.
issued.
outstanding.
outstanding less the number of treasury shares.

Which of the following statements about property dividends is not true?


A property dividend is usually in the form of securities of other companies.
A property dividend is also called a dividend in kind.
The accounting for a property dividend should be based on the carrying value (book
value) of the nonmonetary assets transferred.
All of these statements are true.

A mining company declared a liquidating dividend. The journal entry to record the
declaration must include a debit to
Retained Earnings.
a paid-in capital account.
Accumulated Depletion
Accumulated Depreciation.

Which dividends do not reduce stockholders' equity?


Cash dividends
Stock dividends
Property dividends
Liquidating dividends

The declaration and issuance of a stock dividend larger than 25% of the shares
previously
outstanding
increases common stock outstanding and increases total stockholders' equity.
decreases retained earnings but does not change total stockholders' equity.
may increase or decrease paid-in capital in excess of par but does not change total

stockholders' equity.
increases retained earnings and increases total stockholders' equity

Quirk Corporation issued a 100% stock dividend of its common stock which had a par
value of $10 before and after the dividend. At what amount should retained earnings
be
capitalized for the additional shares issued?
There should be no capitalization of retained earnings.
Par value
Fair value on the declaration date
Fair value on the payment date

Quirk Corporation issued a 100% stock dividend of its common stock which had a par
value of $10 before and after the dividend. At what amount should retained earnings
be
capitalized for the additional shares issued?
There should be no capitalization of retained earnings.
Par value
Fair value on the declaration date
Fair value on the payment date

At the date of declaration of a small common stock dividend, the entry should not
include
a credit to Common Stock Dividend Payable.
a credit to Paid-in Capital in Excess of Par.
a debit to Retained Earnings.
All of these are acceptable.

The balance in Common Stock Dividend Distributable should be reported as a(n)


deduction from common stock issued.
addition to capital stock.
current liability.
contra current asset.

Dividends are not paid on


noncumulative preferred stock.
nonparticipating preferred stock.
treasury common stock.
Dividends are paid on all of these.

Dividends are not paid on


noncumulative preferred stock.
nonparticipating preferred stock.
treasury common stock.
Dividends are paid on all of these.

Manning Company issued 10,000 shares of its $5 par value common stock having a fair

value of $25 per share and 15,000 shares of its $15 par value preferred stock
having a fair
value of $20 per share for a lump sum of $520,000. How much of the proceeds would
be
allocated to the common stock?
$54,167
$236,364
$270,833
$276,250

Norton Company issues 4,000 shares of its $5 par value common stock having a fair
value of $25 per share and 6,000 shares of its $15 par value preferred stock having
a fair
value of $20 per share for a lump sum of $204,000. What amount of the proceeds
should
be allocated to the preferred stock?
$182,750
$127,500
$111,273
$95,625

Luther Inc., has 3,000 shares of 6%, $50 par value, cumulative preferred stock and
100,000 shares of $1 par value common stock outstanding at December 31, 2013, and
December 31, 2012. The board of directors declared and paid a $7,500 dividend in
2012.
In 2013, $36,000 of dividends are declared and paid. What are the dividends
received by
the preferred stockholders in 2013?
$25,500
$18,000
$ 10,500
$ 9,000

Anders, Inc., has 10,000 shares of 5%, $100 par value, cumulative preferred stock
and
40,000 shares of $1 par value common stock outstanding at December 31, 2013. There
were no dividends declared in 2011. The board of directors declares and pays a
$90,000
dividend in 2012 and in 2013. What is the amount of dividends received by the
common
stockholders in 2013?
$30,000
$50,000
$90,000
$0

Ephram Company has 2,000 shares of 5%, $100 par non-cumulative preferred stock
outstanding at December 31, 2008. No dividends have been paid on this stock for
2007 or
2008. Dividends in arrears at December 31, 2008 total
$0.
$1,000.
$10,000.
$20,000.

Rancho Corporation sold 100 shares of treasury stock for $40 per share. The cost
for the
shares was $30. The entry to record the sale will include a
credit to Gain on Sale of Treasury Stock for $3,000.
credit to Paid-in Capital from Treasury Stock for $1,000.
debit to Paid-in Capital in Excess of Par Value for $1,000.
credit to Treasury Stock for $4,000.

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