1. Restrictions on retained earnings include all but which of the following characteristics?

a) A restriction on retained earnings means a reduction in the power to declare dividends.

b) A journal entry must be made to indicate such a restriction.

c) Restrictions on retained earnings must be disclosed in the notes to the financial statements.

d) Only a portion of retained earnings may be restricted.

2. Cambridge Corp. declared a 5% stock dividend. Will Wales owned 300 shares of Cambridge before the dividend. Cambridge shares were trading at $21 before the dividend. Which of the following will be true after the dividend is distributed?

a) Fewer investors will be able to buy Cambridge shares.

b) The total market value of Wills shares was $6,300 before the stock dividend but will probably decrease after the stock dividend.

c) Will owned 300 shares before the stock dividend and 315 shares after the stock dividend.

d) The total market value of Wills shares was $6,300 before the stock dividend and $6,615 after the stock dividend.

Restrictions on retained earnings include all but which of the following characteristics? O Arestriction on retained earnings means a reduction in the power to declare dividends. O Ajournal entry must be made to indicate such a restriction. O Restrictions on retained earnings must be disclosed in the notes to the financial statements. o Only a portion of retained earnings may be restricted. Cambridge Corp. declared a 5% stock dividend. Will Wales owned 300 shares of Cambridge before the dividend. Cambridge shares were trading at $21 before the dividend. Which of the following will be true after the dividend is distributed? O Fewer investors will be able to buy Cambridge shares. O The total market value of Will's shares was $6,300 before the stock dividend but will probably decrease after the stock dividend. O Will owned 300 shares before the stock dividend and 315 shares after the stock dividend. O The total market value of Will's shares was $6,300 before the stock dividend and $6,615 after the stock dividend