4.

Rick Co. had 37 million shares of $2 par common stock outstanding at January 1, 2016. In October, 2016, Rick Co.'s Board of Directors declared and distributed a 2% common stock dividend when the market value of its common stock was $65 per share. In recording this transaction, Rick would:

Credit paid-in capital excess of par for $48.10 million.

Debit retained earnings for $48.10 million.

Credit common stock for $48.10 million.

None of these answer choices correct.

5.

Olsson Corporation received a check from its underwriters for $76 million. This was for the issue of one million of its $5 par stock that the underwriters expect to sell for $76 per share.

Which is the correct entry to record the issue of the stock?

Cash	76,000,000
Deferred stock issue revenue		27,000,000
Common stock		5,000,000
Paid-in capital excess of par		44,000,000

Cash	76,000,000
Stock issue expense		27,000,000
Stock contract receivable		49,000,000

Cash	76,000,000
Common stock		5,000,000
Paid-in capital excess of par		71,000,000

Cash	76,000,000
Common stock		76,000,000

On June 1, 2016, Blue Co. distributed to its common stockholders 130,000 outstanding common shares of its investment in Red, Inc., an unrelated party. The book value on Blues books of Red's $1 par common stock was $1.30 per share. Immediately after the declaration, the market price of Red's stock was $3.00 per share. In its income statement for the year ended June 30, 2016, what amount should Blue report as gain before income taxes on disposal of the stock? (Do not round your intermediate calculation.)

$0.

$169,000.

$221,000.

$390,000.

Lucid Company declared a property dividend of 35,000 shares of $1 par Polk Company common stock. The Polk stock was purchased for $4 per share. Market value was $12 per share on the declaration date and $13 per share on the distribution date. What is the amount of the dividend?

$420,000.

$455,000.

$560,000.

$140,000.