Peabody, Inc. has 5,000 shares of 7%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2014. If the board of directors declares a $30,000 dividend, the (Points : 1)

preferred shareholders will receive 1/10th of what the common shareholders will receive. preferred shareholders will receive the entire $30,000. $30,000 will be held as restricted retained earnings and paid out at some future date. preferred shareholders will receive $15,000 and the common shareholders will receive $15,000.

Question 8.8. Conecuh Manufacturing Corporation purchased 8,000 shares of its own previously issued $10 par common stock for $184,000. As a result of this event, (Points : 1)

Conecuh's total stockholders' equity decreased $184,000. Conecuh's Common Stock account decreased $80,000. Conecuh's Paid-in Capital in Excess of Par account decreased $104,000. All of these answer choices are correct.

Question 9.9. Delta Corp. issues 4,000 shares of $10 par value common stock at $14 per share. When the transaction is recorded, credits are made to (Points : 1)

Common Stock $40,000 and Paid-in Capital in Excess of Stated Value $16,000. Common Stock $56,000. Common Stock $40,000 and Paid-in Capital in Excess of Par $16,000. Common Stock $40,000 and Retained Earnings $16,000.

Question 10.10. Sunshine Company issued 4,000 shares of its $5 par value common stock in payment of its attorney's bill of $80,000. The bill was for services performed in helping the company incorporate. Crain should record this transaction by debiting (Points : 1)

Legal Expense for $20,000. Legal Expense for $80,000. Organization Expense for $20,000. Organization Expense for $80,000.

Question 11.11. On January 1, Sly Corporation had 120,000 shares of $10 par value common stock outstanding. On March 17, the company declared a 15% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The entry to record the transaction of March 17 would include a (Points : 1)

credit to Stock Dividends for $54,000. credit to Cash for $234,000. credit to Common Stock Dividends Distributable for $180,000. debit to Common Stock Dividends Distributable for $180,000.

Question 12.12. The cumulative effect of the declaration and payment of a cash dividend on a company's balance sheet is to (Points : 1)

decrease current liabilities and stockholders' equity. increase total assets and stockholders' equity. increase current liabilities and stockholders' equity. decrease stockholders' equity and total assets.

Question 13.13. Abbies Organics Corporation began business in 2014 by issuing 50,000 shares of $3 par common stock for $8 per share and 20,000 shares of 6%, $10 par preferred stock for par. At year end, the common stock had a market value of $12. On its December 31, 2014 balance sheet, Carson Packaging would report (Points : 1)

Paid-In Capital of $150,000. Common Stock of $600,000. Common Stock of $400,000. Common Stock of $150,000.

Question 14.14. Rendezvous, Inc. has 10,000 shares of 5%, $100 par value, noncumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2014. There were no dividends declared in 2013. The board of directors declares and pays a $110,000 dividend in 2014. What is the amount of dividends received by the common stockholders in 2014? (Points : 1)

$0 $50,000 $110,000 $60,000

Question 15.15. A stockholder who receives a stock dividend would (Points : 1)

expect the market price per share to increase. own more shares of stock. expect retained earnings to increase. expect the par value of the stock to change.

Question 16.16. If a corporation declares a dividend based upon paid-in capital, it is known as a (Points : 1)

scrip dividend. property dividend. paid dividend. liquidating dividend.

Question 17.17. The effect of a stock dividend is to (Points : 1)

decrease total assets and stockholders' equity. change the composition of stockholders' equity. decrease total assets and total liabilities. increase the book value per share of common stock.

Question 18.18. Which one of the following events would not require a formal journal entry on a corporation's books? (Points : 1)

2 for 1 stock split 100% stock dividend 2% stock dividend $1 per share cash dividend

Question 19.19. The following data is available for Santos Service Corporation at December 31, 2014: Common stock, par $10 (authorized 100,000 shares) = $400,000 Treasury Stock (at cost $15 per share) = $ 27,000 Based on the data, how many shares of common stock have been issued? (Points : 1)

50,000 40,000 49,880 38,200

Question 20.20. If an investment firm underwrites a stock issue, the (Points : 1)

corporation obtains cash immediately from the investment firm. issuance of stock is likely to be directly to creditors. investment firm has guaranteed profits on the sale of the stock. risk of being unable to sell the shares stays with the issuing corporation.

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