Question 41 (2 points)

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Which of the following would have no effect on Retained Earnings?

Question 41 options:

	Declaration of a cash dividend
	Declaration of a stock dividend
	Declaration of a stock split
	A prior period adjustment

Question 42 (2 points)

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Dividends become a liability of a corporation:

Question 42 options:

	On the date the board of directors declares the dividend.
	On the date of record.
	On the date payment is to be made.
	When cumulative preferred stock dividends are in arrears.

Question 43 (2 points)

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The amount of earnings per share is usually computed:

Question 43 options:

	For both preferred and common stock.
	For common stock by deducting the dividends on preferred stock from net income and dividing the remaining amount by the weighted average number of common shares outstanding.
	By dividing net income by the combined number of preferred and common shares.
	On the basis of the number of shares outstanding at year-end, regardless of changes in the number of shares during the year.

Question 44 (2 points)

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On January 1, Year 2, Carleton Corporation had 55,000 shares of $6 par value common stock outstanding. On March 31, Year 2, Carleton issued an additional 10,000 shares in exchange for a building. What number of shares will be used in the computation of earnings per share for Year 2?

Question 44 options:

	55,000
	65,000
	62,500
	62,000

Question 45 (2 points)

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For the current year, Evoque Company reported basic earnings per share of $8 and diluted earnings per share of $3. The difference between these figures is attributable to outstanding shares of convertible preferred stock. If all this preferred stock had actually been converted into common stock at the beginning of the current year, Evoque Company would have reported only one earnings per share amount, which would have been:

Question 45 options:

	$8.
	$5.
	$3.
	Cannot be determined.

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