Question 1:

The Speed Company issues an additional 10 000 preferred shares for cash at $48.00 per share. The shares were issued with $30.00 payable on application and $18.00 on allotment. The entry to record the transaction will result in a debit to cash for $480,000.00 and credit(s) to:

a) Preferred share for $300,000 and allotment for $180,000

b) Preferred share for $300,000 and retained earnings for $158,000

c) Paid up capital from ordinary shareholders for $300,000 and allotment for $180,000

d) Preferred share for $480,000

Question 2:

When a company declares and issues a share dividend:

a) Cash increases

b) Total equity remains unchanged

c) Total liabilities increase

d) Retained earnings remain unchanged