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Module 15. Stockholders' Equity year 2 5415.000 d $54000 In year 1. Fog, Inc. issued $10 par value common ock for 25 per share. No

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Module 15. Stockholders' Equity year 2 5415.000 d $54000 In year 1. Fog, Inc. issued $10 par value common ock for 25 per share. No other common stock transactions ed until March 31, year when Foge acquired some of the issued shares for $20 per share and retired them. Which of the following statements correctly states an effect of this quisition and retirement? Year 3 net income is decreased h Year 3 net income is increased c. Additional paid-in capital is decreased & Retained earnings is increased 1 year I had any leo Machi 10 interest rate How should as the dividend and related interes Debit retained earnings for $110.000 year 1. Debit retained earnings for $110.000 M L Debit retained earnings for $100.000 April 1. and debit interest expense for $10.000 March year 2. d. Debit retained earnings for $100.000 on April year 1, and debit interest expense for 57500 December 31, year 1. 27. On January 2. year 2.Lake Mining Co.'s board of directors declared a cash dividend of $400,000 to Mockholders of record on January 18, year 2. payable on February 10 year 2. The dividend is permissible under law in Lake's state of incorporation. Selected data from Lake's December 31, year 1 balance sheet are as follows: Accumulated depletion $100.000 Capital stock 500,000 Additional paid-in capital Retained earnings 300.000 E Dividends 21. Plack Co. purchased 10,000 shares (25 ownership) of Ty Dorn on February 14, year 1. Plack received a stock dividend 2.000 shares on April 30, year I, when the market value per share was $35. Ty paid a cash dividend of S2 per share ca December 15 year 1. In its year I income statement, what emount should Plack report as dividend income? $20,000 $24,000 590,000 d 594.000 14. Arp Corp's outstanding capital stock at December 15, yarl.consisted of the following 150.000 . 30,000 shares of 56 cm lative preferred stock. par value $10 per sture, fully participating as to dividends. No dividends were in arrears. 200,000 shares of common stock. par value $1 per share. On December 15 year 1. Arp declared dividends of $100,000 What was the amount of dividends payable to Arp's common stockholders? The $400,000 dividend includes a liquidating dividend of a. $0 b. $100,000 c. $150.000 d. $300,000 28. On June 27, year 1. Brite Co. distributed to its common stockholders 100,000 outstanding common shares of its investment in Quik, Inc., an unrelated party. The carrying amount on Brite's books of Quik's $1 par common stock was $2 per share. Immediately after the distribution, the market price of Quik's stock was $2.50 per share. In its income statement for the year ended June 30, year I, what amount should Brite report as gain before income taxes on disposal of the stock? 2. $10.000 b. 534.000 c. $40,000 $47.500 25. Ai December 31. year 2 and year 3. Apex Co. had 3.000 ares of S100 par, 5% cumulative preferred stock outstanding No dividends were in arrears as of December 31. year I. Apex did not declare a dividend during year 2. During year 3. Apex paid a cash dividend of S10,000 on its preferred stock Aperthold report dividends in ancars in its year 3 financial a $250,000 b. $200,000 c. $50.000 d. 30 29. On December 1, year 1, Nilo Corp. declared a property dividend of marketable securities to be distributed on December 31, year 1. to stockholders of record on December 15, year 1. On December 1. year 1, the trading securities 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 I retained earnings, after all nominal accounts are closed? Accrued liability of S15.000 Disclosure of $15.000 Accrued liability of $20,000 d Disclosure of $20.000 26. East Capa calendar year company had sufficient and earnings in year as a basis for dividends, but was temporarily short of cash East declared a dividend of 000. April 1 year I, and issued promissory notes 10 chers in a fash. The notes, which were dated b. $18.000 increase $60.000 decrease. d. $78,000 decrease

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