ACCT&202 CHAPTER 13 1 OnJa uary 15, Year 5. Roo Ca declared its mal cash dividend on common stock for the year ended January 31, Year 5 PRACTICE QUESTIONS The dividend was paid decrease retained eamings by the amount of the dividend? A. January 15, Year 5 on February 9, Year 5, to shareholders of record as of January 28, Year 5 On what date should Rico D February 9, Year 5 B. January 31, Year 5 Year 5. C. January 28, Year 5 2. Bal Corp. declared a $25,00 cash dividend on May 8 to shareholders of record on May 23, payabile on June 3. As a result of this cash dividend, working capita A. Was not afected B. Decreased on June 3 C. Decreased on May 23 D. Decreased on May 8 3. An entity declared a cash dividend on ts common stock in December Year 1, payable in January Year 2 Retained eamings wil A. Increase on the date of declaration B. Not be afflected on the date of declaration Not be affected on the date of payment D C. Decrease on the date of payment 4. When an entity declares a cash dividend, retained eamings is decreased by the amount of the dividend on the date of A. Declaration B. Record C. Payment D. Declaration or record, whichever is earier An enity declared a cash dividend on its common stock on December 15, Year 1, payable on January 12, Year 2. How would this dividend affect equity on the following dates? 5. DEC 15, YEAR 1 A Decrease B. Decrease C. No effect D. No effect DEC 31, YEAR1 No effect No effect JAN 12, YEAR 2 Decrease No effect No effect Decrease No effect Ad December 31, Year 3and Year 4, Car Corp. had outstanding 400 shares of $100 par vale,6%armulate preferred stok and 20,000 shares of $10 par value common stock Alt December 31, Year 3 dividends in arrears on the preflermed stock were $12,000 Cash dividends declared in Year 4 totaled $44,000. What amounts were payable on each class of stock? PREFERRED STOCK COMMON STOCK A $44,000 B $36,000 $0 $8,000 PREFERRED STOCK COMMON STOCK C. $32,000 D. $24,000 $12,000 $20,000 7. On December i, Year 4, Nlo Corp. declared a property dividend to be disthbuted on December 31, Year 4, to shareholders of record on December 15, Year 4. On December 1, Year 4, the property to be transferred had a carrying amount of $60,000 and a fair value of $78,000. What is the effect of this property dividend on Nilo's Year 4 retained earnings, after all nominal accounts are closed? A. $0 B. $18,000 increase C. $60,000 decrease. D. $78,000 decrease. The excess of the merchandise's carrying amount over its fair value should be A. ignored B. Reported as a separately disclosed reduction of retained eamings C. Reported as an extraordinary loss, net of income taxes D. Reported as a reduction in operating income. 9 A property dividend should be recorded in retained eamings at the property's C. A. Fair value at date of declaration. B. Fair value at date of issuance (payment) Carrying amount at date of declaration. Carrying amount at date of issuance. D. D. 10. Munn Corp's records included the following equity accounts $255,000 Preferred stock, par value $15, authorized 20,000 shares Additional paid-in capital, preferred stock Common stock, go par, $5 stated value, 100,000 shares authorized300,000 15,000 In Munn's statement of equity, the number of issued and outstanding shares for each class of stock is PREFERRED STOCK 17,000 18,000 COMMON STOCK C. 63,000 D. 63,000 COMMON STOCK A 60,000 B 60,000 PREFERRED STOCK 17,000 18,000 Page 1 of 4
