41.

A company sells 1 million shares of common stock with no par value for $15 a share. In recording the transaction, it would debit:

A.	Cash and credit Additional Paid-in Capital for $15 million.

B.	Cash and credit Common Stock for $15 million.

C.	Common Stock and credit Cash for $15 million.

D.	Common Stock and credit Additional Paid-in Capital for $15 million.

42.

Melrose Inc. buys back 300,000 shares of its stock from investors at $6.50 a share. Two years later, it reissues this stock for $6.00 a share. The stock reissue would be recorded with a debit to Cash for:

A.	$1.8 million, a debit to Additional Paid-in Capital for $150,000, and a credit to Treasury Stock for $1.95 million.

B.	$1.95 million, a credit to Treasury Stock for $1.8 million, and a credit to Additional Paid-in Capital for $150,000.

C.	$1.95 million and a credit to Treasury Stock for $1.95 million.

D.	$1.8 million and a credit to Treasury Stock for $1.8 million.

43.

Which of the following statements about when cash dividends can be paid is not correct?

A.	The Retained Earnings account must have an accumulated balance sufficient to cover the amount of the dividends to be paid.

B.	The Cash account must have a balance sufficient to pay the dividends.

C.	The board of directors must have declared the dividend before it can be paid.

D.	Loan covenants cannot restrict the payment of dividends.

44.

Which of the following statements is correct?

A.	Stock splits and stock dividends both reduce the market price of a share, but only stock splits reduce the par value of a share.

B.	Stock splits and stock dividends both reduce the market price of a share and the par value of a share.

C.	Stock splits and stock dividends both reduce the market price of a share, but only stock dividends reduce the par value of a share.

D.	Stock splits and stock dividends both reduce the market price of a share and reduce Retained Earnings.

45.

When does a corporation record an increase in Dividends Payable?

A.	On the date of record

B.	On the date of payment

C.	On the declaration date

D.	On the date of issuance

46.

A dividend date of record is the date on which the corporation:

A.	makes no entry.

B.	records an increase in Dividends Payable.

C.	records a decrease in Dividends Payable.

D.	records an increase in Dividends.