PLEASE ME THE DETAIL, NOT JUST THE ANWSER.

AC Corporations: Dividends, Retained Earnings, and Income Reporting

56. ABC, Inc. has 1,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2010. What is the annual dividend on the preferred stock? a. $50 per share b. $5,000 in total c. $500 in total d. $.50 per share

57. Agler, Inc. has 10,000 shares of 7%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2010. If the board of directors declares a $60,000 dividend, the a. preferred shareholders will receive 1/10th of what the common shareholders will receive. b. preferred shareholders will receive the entire $60,000. c. $60,000 will be held as restricted retained earnings and paid out at some future date. d. preferred shareholders will receive $30,000 and the common shareholders will receive $30,000. 58. Manner, Inc. has 5,000 shares of 5%, $100 par value, noncumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2010. There were no dividends declared in 2009. The board of directors declares and pays a $45,000 dividend in 2010. What is the amount of dividends received by the common stockholders in 2010? a. $0 b. $25,000 c. $45,000 d. $20,000 59. Lopez, Inc. has 2,000 shares of 4%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2009, and December 31, 2010. The board of directors declared and paid a $3,000 dividend in 2009. In 2010, $15,000 of dividends are declared and paid. What are the dividends received by the preferred and common shareholders in 2010? Preferred Common a. $9,000 $6,000 b. $7,500 $7,500 c. $5,000 $10,000 d. $4,000 $11,000

72. Outstanding stock of the Colt Corporation included 20,000 shares of $5 par common stock and 5,000 shares of 5%, $10 par noncumulative preferred stock. In 2009, Colt declared and paid dividends of $2,000. In 2010, Colt declared and paid dividends of $6,000. How much of the 2010 dividend was distributed to preferred shareholders? a. $3,000 b. $3,500 c. $2,500 d. None of the above 73. Outstanding stock of the Abel Corporation included 20,000 shares of $5 par common stock and 10,000 shares of 5%, $10 par noncumulative preferred stock. In 2009, Abel declared and paid dividends of $4,000. In 2010, Abel declared and paid dividends of $12,000. How much of the 2010 dividend was distributed to preferred shareholders? a. $7,000 b. $4,000 c. $5,000 d. None of the above

76. Sun Inc. has 5,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2010. What is the annual dividend on the preferred stock? a. $50 per share b. $25,000 in total c. $5,000 in total d. $0.50 per share

77. Allstate, Inc., has 10,000 shares of 6%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2010. If the board of directors declares a $200,000 dividend, the a. preferred stockholders will receive 1/10th of what the common stockholders will receive. b. preferred stockholders will receive the entire $200,000. c. $60,000 will be held as restricted retained earnings and paid out at some future date. d. preferred stockholders will receive $60,000 and the common stockholders will receive $140,000. 78. Archer, Inc., has 10,000 shares of 5%, $100 par value, noncumulative preferred stock and 40,000 shares of $1 par value common stock outstanding at December 31, 2010. There were no dividends declared in 2009. The board of directors declares and pays a $120,000 dividend in 2010. What is the amount of dividends received by the common stockholders in 2010? a. $0 b. $50,000 c. $20,000 d. $70,000 79. Luther Inc., has 2,000 shares of 6%, $50 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2010, and December 31, 2009. The board of directors declared and paid a $5,000 dividend in 2009. In 2010, $24,000 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2010? a. $17,000 b. $12,000 c. $7,000 d. $6,000 80. Anders, Inc., has 5,000 shares of 5%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2011. There were no dividends declared in 2009. The board of directors declares and pays a $45,000 dividend in 2010 and in 2011. What is the amount of dividends received by the common stockholders in 2011? a. $15,000 b. $25,000 c. $45,000 d. $0 14 - 16 Test Bank for Accounting Principles, Ninth Edition 81. Cuther Inc., has 1,000 shares of 6%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2009, and December 31, 2010. The board of directors declared and paid a $2,000 dividend in 2009. In 2010, $12,000 of dividends are declared and paid. What are the dividends received by the common stockholders in 2010? a. $8,000 b. $6,000 c. $4,000 d. $3,000 82. On January 1, Swanson Corporation had 60,000 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 a. credit to Retained Earnings for $27,000. b. credit to Cash for $117,000. c. credit to Common Stock Dividends Distributable for $90,000. d. debit to Common Stock Dividends Distributable for $90,000. 83. On January 1, Swanson Corporation had 60,000 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 stock was distributed on March 30. The entry to record the transaction of March 30 would include a a. credit to Cash for $90,000. b. debit to Common Stock Dividends Distributable for $90,000. c. credit to Paid-in Capital in Excess of Par Value for $27,000. d. debit to Retained Earnings for $27,000. 84. On January 1, Sandford Corporation had 80,000 shares of $10 par value common stock outstanding. On June 17, the company declared a 15% stock dividend to stockholders of record on June 20. Market value of the stock was $15 on June 17. The entry to record the transaction of June 17 would include a a. debit to Retained Earnings for $180,000. b. credit to Cash for $180,000. c. credit to Common Stock Dividends Distributable for $180,000. d. credit to Common Stock Dividends Distributable for $60,000. Corporations: Dividends, Retained Earnings, and Income Reporting 14 - 17 85. On January 1, Sanford Corporation had 80,000 shares of $10 par value common stock outstanding. On June 17, the company declared a 15% stock dividend to stockholders of record on June 20. Market value of the stock was $15 on June 17. The stock was distributed on June 30. The entry to record the transaction of June 30 would include a a. credit to Common Stock for $120,000. b. debit to Common Stock Dividends Distributable for $180,000. c. credit to Paid-in Capital in Excess of Par Value for $60,000. d. debit to Retained Earnings for $60,000. 86. Colson Inc. declared a $160,000 cash dividend. It currently has 6,000 shares of 7%, $100 par value cumulative preferred stock outstanding. It is one year in arrears on its preferred stock. How much cash will Colson distribute to the common stockholders? a. $76,000. b. $84,000. c. $118,000. d. None. 87. Ludwick Inc. has retained earnings of $800,000 and total stockholders' equity of $2,000,000. It has 200,000 shares of $5 par value common stock outstanding, which is currently selling for $30 per share. If Ludwick declares a 10% stock dividend on its common stock: a. net income will decrease by $100,000. b. retained earnings will decrease by $100,000 and total stockholders' equity will increase by $100,000. c. retained earnings will decrease by $600,000 and total stockholders' equity will increase by $600,000. d. retained earnings will decrease by $600,000 and total paid-in capital will increase by $600,000. 88. On December 31, 2010, Springer, Inc. has 3,000 shares of 6% $100 par value cumulative preferred stock and 45,000 shares of $10 par value common stock outstanding. On December 31, 2010, the directors declare a $12,000 cash dividend. The entry to record the declaration of the dividend would include: a. a credit of $6,000 to Retained Earnings. b. a note in the financial statements that dividends of $6 per share are in arrears on preferred stock for 2010. c. a debit of $12,000 to Common Stock. d. a credit of $12,000 to Dividends Payable. 89. Franklin, Inc. declares a 10% common stock dividend when it has 30,000 shares of $10 par value common stock outstanding. If the market value of $24 per share is used, the amounts debited to Retained Earnings and credited to Paid-in Capital in Excess of Par Value are: Paid-in Capital in Retained Earnings Excess of Par Value a. $30,000 $0 b. $72,000 $42,000 c. $72,000 $30,000 d. $30,000 $42,000 90. Shannon Manufacturing declared a 10% stock dividend when it had 250,000 shares of $3 par value common stock outstanding. The market price per common share was $12 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to a. Retained Earnings for $75,000. b. Paid-in Capital in Excess of Par for $225,000. c. Common Stock for $75,000. d. Common Stock Dividends Distributable for $300,000. 91. The following selected amounts are available for Sanders Company. Retained earnings (beginning) $800 Net loss 100 Cash dividends declared 100 Stock dividends declared 50 What is its ending retained earnings balance? a. $650 b. $700 c. $550 d. $600 92. Turquoise and Topaz Sisters had retained earnings of $15,000 on the balance sheet but disclosed in the footnotes that $2,000 of retained earnings was restricted for plant expansion and $1,000 was restricted for bond repayments. Cash of $2,000 had been set aside for the plant expansion. How much of retained earnings is available for dividends? a. $12,000 b. $13,000 c. $15,000 d. $10,000 Corporations: Dividends, Retained Earnings, and Income Reporting 14 - 19 93. Irwin, Inc. had 300,000 shares of common stock outstanding before a stock split occurred, and 900,000 shares outstanding after the stock split. The stock split was a. 3-for-9. b. 9-for-1. c. 1-for-9. d. 3-for-1. 94. Restricting retained earnings for the cost of treasury stock purchased is a a. contractual restriction. b. legal restriction. c. stock restriction. d. voluntary restriction. 95. A prior period adjustment that corrects income of a prior period requires that an entry be made to a. an income statement account. b. a current year revenue or expense account. c. the retained earnings account. d. an asset account.

{C}77. {C}Allstate, Inc., has 10,000 shares of 6%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2010. If the board of directors declares a $200,000 dividend, the a. preferred stockholders will receive 1/10th of what the common stockholders will receive. b. preferred stockholders will receive the entire $200,000. c. $60,000 will be held as restricted retained earnings and paid out at some future date. d. preferred stockholders will receive $60,000 and the common stockholders will receive $140,000. 78. Archer, Inc., has 10,000 shares of 5%, $100 par value, noncumulative preferred stock and 40,000 shares of $1 par value common stock outstanding at December 31, 2010. There were no dividends declared in 2009. The board of directors declares and pays a $120,000 dividend in 2010. What is the amount of dividends received by the common stockholders in 2010? a. $0 b. $50,000 c. $20,000 d. $70,000 79. Luther Inc., has 2,000 shares of 6%, $50 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2010, and December 31, 2009. The board of directors declared and paid a $5,000 dividend in 2009. In 2010, $24,000 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2010? a. $17,000 b. $12,000 c. $7,000 d. $6,000 80. Anders, Inc., has 5,000 shares of 5%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2011. There were no dividends declared in 2009. The board of directors declares and pays a $45,000 dividend in 2010 and in 2011. What is the amount of dividends received by the common stockholders in 2011? a. $15,000 b. $25,000 c. $45,000 d. $0 81. Cuther Inc., has 1,000 shares of 6%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2009, and December 31, 2010. The board of directors declared and paid a $2,000 dividend in 2009. In 2010, $12,000 of dividends are declared and paid. What are the dividends received by the common stockholders in 2010? a. $8,000 b. $6,000 c. $4,000 d. $3,000 82. On January 1, Swanson Corporation had 60,000 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 a. credit to Retained Earnings for $27,000. b. credit to Cash for $117,000. c. credit to Common Stock Dividends Distributable for $90,000. d. debit to Common Stock Dividends Distributable for $90,000. 83. On January 1, Swanson Corporation had 60,000 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 stock was distributed on March 30. The entry to record the transaction of March 30 would include a a. credit to Cash for $90,000. b. debit to Common Stock Dividends Distributable for $90,000. c. credit to Paid-in Capital in Excess of Par Value for $27,000. d. debit to Retained Earnings for $27,000. 84. On January 1, Sandford Corporation had 80,000 shares of $10 par value common stock outstanding. On June 17, the company declared a 15% stock dividend to stockholders of record on June 20. Market value of the stock was $15 on June 17. The entry to record the transaction of June 17 would include a a. debit to Retained Earnings for $180,000. b. credit to Cash for $180,000. c. credit to Common Stock Dividends Distributable for $180,000. d. credit to Common Stock Dividends Distributable for $60,000. Corporations: Dividends, Retained Earnings, and Income Reporting 14 - 17 85. On January 1, Sanford Corporation had 80,000 shares of $10 par value common stock outstanding. On June 17, the company declared a 15% stock dividend to stockholders of record on June 20. Market value of the stock was $15 on June 17. The stock was distributed on June 30. The entry to record the transaction of June 30 would include a a. credit to Common Stock for $120,000. b. debit to Common Stock Dividends Distributable for $180,000. c. credit to Paid-in Capital in Excess of Par Value for $60,000. d. debit to Retained Earnings for $60,000. 86. Colson Inc. declared a $160,000 cash dividend. It currently has 6,000 shares of 7%, $100 par value cumulative preferred stock outstanding. It is one year in arrears on its preferred stock. How much cash will Colson distribute to the common stockholders? a. $76,000. b. $84,000. c. $118,000. d. None. 87. Ludwick Inc. has retained earnings of $800,000 and total stockholders' equity of $2,000,000. It has 200,000 shares of $5 par value common stock outstanding, which is currently selling for $30 per share. If Ludwick declares a 10% stock dividend on its common stock: a. net income will decrease by $100,000. b. retained earnings will decrease by $100,000 and total stockholders' equity will increase by $100,000. c. retained earnings will decrease by $600,000 and total stockholders' equity will increase by $600,000. d. retained earnings will decrease by $600,000 and total paid-in capital will increase by $600,000. 88. On December 31, 2010, Springer, Inc. has 3,000 shares of 6% $100 par value cumulative preferred stock and 45,000 shares of $10 par value common stock outstanding. On December 31, 2010, the directors declare a $12,000 cash dividend. The entry to record the declaration of the dividend would include: a. a credit of $6,000 to Retained Earnings. b. a note in the financial statements that dividends of $6 per share are in arrears on preferred stock for 2010. c. a debit of $12,000 to Common Stock. d. a credit of $12,000 to Dividends Payable. 89. Franklin, Inc. declares a 10% common stock dividend when it has 30,000 shares of $10 par value common stock outstanding. If the market value of $24 per share is used, the amounts debited to Retained Earnings and credited to Paid-in Capital in Excess of Par Value are: Paid-in Capital in Retained Earnings Excess of Par Value a. $30,000 $0 b. $72,000 $42,000 c. $72,000 $30,000 d. $30,000 $42,000 90. Shannon Manufacturing declared a 10% stock dividend when it had 250,000 shares of $3 par value common stock outstanding. The market price per common share was $12 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to a. Retained Earnings for $75,000. b. Paid-in Capital in Excess of Par for $225,000. c. Common Stock for $75,000. d. Common Stock Dividends Distributable for $300,000. 91. The following selected amounts are available for Sanders Company. Retained earnings (beginning) $800 Net loss 100 Cash dividends declared 100 Stock dividends declared 50 What is its ending retained earnings balance? a. $650 b. $700 c. $550 d. $600 92. Turquoise and Topaz Sisters had retained earnings of $15,000 on the balance sheet but disclosed in the footnotes that $2,000 of retained earnings was restricted for plant expansion and $1,000 was restricted for bond repayments. Cash of $2,000 had been set aside for the plant expansion. How much of retained earnings is available for dividends? a. $12,000 b. $13,000 c. $15,000 d. $10,000 Corporations: Dividends, Retained Earnings, and Income Reporting 14 - 19 93. Irwin, Inc. had 300,000 shares of common stock outstanding before a stock split occurred, and 900,000 shares outstanding after the stock split. The stock split was a. 3-for-9. b. 9-for-1. c. 1-for-9. d. 3-for-1. 94. Restricting retained earnings for the cost of treasury stock purchased is a a. contractual restriction. b. legal restriction. c. stock restriction. d. voluntary restriction. 95. A prior period adjustment that corrects income of a prior period requires that an entry be made to a. an income statement account. b. a current year revenue or expense account. c. the retained earnings account. d. an asset account.

116. Wheeler Company reports the following amounts for 2010. Net income $150,000 Average stockholders' equity 1,000,000 Preferred dividends 42,000 Par value preferred stock 200,000 The 2010 rate of return on common stockholders' equity is a. 18.8%. b. 13.5%. c. 15.0%. d. 10.8%. 117. During 2010 Silas Inc. had sales revenue $564,000, gross profit $264,000, operating expenses $99,000, cash dividends $45,000, other expenses and losses $30,000. Its corporate tax rate is 30%. What was Silas's income tax expense for the year? a. $27,000 b. $79,200 c. $169,200 d. $40,500 118. Jansen Corporation had 300,000 shares of common stock outstanding during the year. Jansen declared and paid cash dividends of $200,000 on the common stock and $160,000 on the preferred stock. Net income for the year was $880,000. What is Jansen's earnings per share? a. $1.73 b. $2.27 c. $2.40 d. $2.93 Ans: c, SO: 5, Bloom: AP, Difficulty: Hard, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: FSA 119. The income statement for Roland Inc. shows income before income taxes $700,000, income tax expenses $210,000, and net income $490,000. If Roland declared $150,000 of cash dividends on preferred stock and has 100,000 shares of common stock outstanding throughout the year, earnings per share is: a. $5.50 b. $3.40 c. $1.50 d. $0.60 122. West, Inc. has a net income of $500,000 for 2010, and there are 200,000 weightedaverage shares of common stock outstanding. Dividends declared and paid during the year amounted to $80,000 on the preferred stock and $120,000 on the common stock. The earnings per share for 2010 is a. $2.50. b. $1.90. c. $2.10. d. $1.50.

126. Dillon Corporation splits its common stock 2 for 1, when the market value is $40 per share. Prior to the split, Dillon had 50,000 shares of $10 par value common stock issued and outstanding. After the split, the par value of the stock a. remains the same. b. is reduced to $2 per share. c. is reduced to $5 per share. d. is reduced to $20 per share.

129. Jennifer Company reports the following amounts for 2010: Net income $135,000 Average stockholders' equity 500,000 Preferred dividends 35,000 Par value preferred stock 100,000 The 2010 rate of return on common stockholders' equity is a. 25.0%. b. 22.5%. c. 27.0%. d. 33.8%.

131. Norman Corporation had 250,000 shares of common stock outstanding during the year. Norman declared and paid cash dividends of $200,000 on the common stock and $160,000 on the preferred stock. Net income for the year was $880,000. What is Norman