21) Retained earnings: A) Represent an amount of cash available to pay shareholders consists of a company's cumulative net income less any net losses and C) Are D) Represents the amount shareholders are never adjusted for anything other than net income or dividends. guaranteed to receive upon company liquidation E) Can only be appropriated by setting aside a cash fund. 22) Stockholdens' equity consists of which of the following? 22) A) Premiums and discounts. B) Long-term assets C) Paid-in capital and retained earnings D) Retained earnings and cash. E) Paid-in capital and par value. 23) Percy Corporation was formed on January 1. The corporate charter authorized 100,000 23) shares of S10 par value common stock. During the first month of operation, the corporation issued 400 shares to its attorneys in payment of a S5,000 charge for drawing up the articles of incorporation. The entry to record this transaction would include: A) A debit to Organization Expenses for $4,000. B) A debit to Organization Expenses for $5,000. C) A credit to Paid-in Capital in Excess of Par Value, Common Stock for $5,000. D) A debit to Paid-in Capital in Excess of Par Value, Common Stock for $2,000. E) A credit to Common Stock for $5,000. 24) A premium on common stock: 24) A) Occurs when a corporation sells its stock for more than par or stated value. B) Is the difference between par value and issue price when the amount paid is below par. C) Represents capital gain on sale of stock. D) Is prohibited in most states. E) Represents profit from issuing stock. 25) 25) Which of the following is true of a stock dividend? A) Does not affect total equity, but transfer amounts between the components of equity B) Reduces a corporation's assets and stockholders' equity. C) The decision to declare a stock dividend resides with the shareholders. D) Transfers a portion of equity from retained earnings to a cash reserve account. E) It is a liability on the balance sheet