For a corporation to pay a dividend it must have all of the following EXCEPT:

Question 1 options:

A)

Adequate cash.

B)

Adequate inventory.

C)

Declaration of dividends by the board of directors

D)

Retained earnings

Which of the following is NOT a significant date with respect to dividends?

Question 2 options:

A)

payment date

B)

declaration date.

C)

date of record.

D)

split date

Corporations generally issue stock dividends in order to

Question 3 options:

A)

increase the market price per share

B)

increase the marketability of the stock

C)

exceed stockholders' dividend expectations

D)

decrease the amount of capital in the corporation

Sometimes a company may have retained earnings restrictions. These may result from all of the following EXCEPT:

Question 4 options:

A)

contractual restrictions.

B)

legal restricitions.

C)

prior period adjustments

D)

voluntary restrictions.

After a cash dividend is declared and paid, theoveralleffect on the balance sheet is to:

Question 5 options:

A)

decrease liabilities

B)

decrease assets

C)

increase liabilities

D)

increase retained earnings

Abbott Corporation splits its common stock 3 for 1, when the market value is $80 per share. Prior to the split, Abbott had 100,000 shares of $18 par value common stock isssuedand outstanding. After the split, the par value of the stock

Question 6 options:

A)

is reduced to $6 per share.

B)

is reduced to $12 per share.

C)

is increased to $36 per share

D)

there is no change to par value.

Cash dividends become a liability of the corporation on the record date.

Question 7 options:

TrueFalse

When a company purchases its own stock (i.e.Kodak purchases Kodak stock),the journal entry would record a debit to asset such as Investments.

Question 8 options:

TrueFalse

A stock split is not recorded with a journal entry in the accounting records.

Question 9 options:

TrueFalse

A liquidating dividend is a dividend declared out of paid-in-capital.

Question 10 options:

TrueFalse

ABC, Inc. has 4,000 shares of 6%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31. What is thetotalannual dividend on the preferred stock?

Question 11 options:

A)

$6 per share

B)

$100 per share

C)

$4,000 in total

D)

$24,000 in total

Jennifer Company reports the following amounts for the year: Net income $ 800,000 Average common stockholders' equity 4,800,000 Preferred dividends 200,000 Par value preferred stock 200,000 The rate of return on common stockholders' equity for this year is

Question 12 options:

A)

10.0%.

B)

16.67%.

C)

25.0%.

D)

12.5%.