18-2

Mike Bradley & Company, a family-owned corporation, declared and distributed a property dividend from its overstocked inventory instead of declaring its usual cash dividend. The inventory's book value exceeded its fair value. The excess is:

A-Reported as a direct reduction of shareholders' equity.

B-Reported as other comprehensive income.

C-Reported as a loss.

D-Not reported.

4-18

What is the effect of the declaration and subsequent issuance of a 10% stock dividend on each of the following?

	Retained earnings	Paid-in capital
a.	decrease	increase
b.	no effect	increase
c.	increase	decrease
d.	no effect	no effect

13-18

The 12/31/2016 balance sheet of Despot Inc. included the following:

Common stock, 25 million shares at $20 par	$500 million
Paid-in capitalexcess of par	3,000 million
Retained earnings	980 million

In January 2016, Despot recorded a transaction with this journal entry:

Cash	150 million
Common stock		100 million
Paid-in capitalexcess of par		50 million

The transaction was for the:

A-Issue of 2 million shares of common stock at par value.

B-Issue of common stock for $150 million in cash.

C-Receipt of $20 per share for a new stock issue.

D-All of these answer choices are correct.

19-18

Tim Howard Gloves issued 4.75% bonds with a face amount of $24 million, together with 4 million shares of its $1 par value common stock, for a combined cash amount of $44 million. The market value of Howard's stock cannot be determined. The bonds would have sold for $18 million if issued separately. For this transaction, Howard should record paid-in capitalexcess of par in the amount of:

A-$26 million

B-$22 million

C-$18 million

D-$16 million

20-18

The following partial information is taken from the comparative balance sheet of Levi Corporation:

Shareholders equity	12/31/2016	12/31/2015
Common stock, $5 par value; 20 million shares authorized; 15 million shares issued and 9 million shares outstanding at 12/31/2016; and ____ million shares issued and ____ shares outstanding at 12/31/2015.	$75 million	$45 million
Additional paid-in capital on common stock	520 million	392 million
Retained earnings	197 million	157 million
Treasury common stock, at cost, 6 million shares at 12/31/2016 and 4 million shares at 12/31/2015	(72 million)	(50 million)
Total shareholders equity	$720 million	$544 million

How many of Levi's common shares were outstanding on 12/31/2015?

A-14 million.

B-9 million.

C-5 million.

D-None of these answer choices is correct.