7.

At the time that Kirby Company issued a 5-for-3 stock split, the company had 1,200 shares of $10 par value common stock outstanding. Stockholders' equity also contained $24,000 of additional paid-in capital and $40,000 of retained earnings. Immediately after the stock split the:

Multiple Choice

balance in the common stock account would amount to $12,000.

amount of paid-in capital in excess of par-common would be equal to $40,000.

balance in the retained earnings account would amount to $8,000.

number of outstanding shares of common stock would be 60,000.

8.

On September 1, Year 1, Orville Corporation has unrestricted Retained Earnings of $8,500,000, Appropriated Retained Earnings of $5,500,000, Cash of $10,000,000, and Accounts Payable of $2,000,000. What is the maximum amount that can be used for cash dividends?

Multiple Choice

$10,000,000

$8,500,000

$11,000,000

$3,000,000

9.

In accordance with restrictive debt covenants, Maynard Company appropriated $20,000 of retained earnings. How would the appropriation affect the financial statements?

Multiple Choice

Decease retained earnings and increase appropriated retained earnings for $20,000.

Decrease appropriated retained earnings and increase retained earnings for $20,000.

Decrease appropriated retained earnings and decrease cash for $20,000.

No entry would be required.