Question
Use the following to answer questions 52-54: On January 1, Carita's Dancing Divas had total shareholders' equity as shown below when their shares were selling
Use the following to answer questions 52-54:
On January 1, Carita's Dancing Divas had total shareholders' equity as shown below when their shares were selling at $25 per share:
| Common shares (125,000 shares) | $2,500,000 |
| Retained earnings | 4,000,000 |
| Total shareholders' equity | $6,500,000 |
| 52. | Assume the company declared and issued a 50% stock dividend. The effect of this dividend would | |
|
| A) | increase common shares by $1,250,000 and shares issued and outstanding by 62,500. |
|
| B) | increase common shares by $1,250,000 with no change in the number of issued and outstanding shares. |
|
| C) | leave total shareholders' equity unchanged but increase the number of shares issued and outstanding to 187,500. |
|
| D) | reduce retained earnings by $2,000,000 and double the number of shares issued and outstanding. |
| 53. | Assume the company declared and issued a 10% stock dividend and that the market price remained constant. The effect of this dividend would | |
|
| A) | increase common shares by $312,500. |
|
| B) | increase common shares by $250,000. |
|
| C) | decrease retained earnings by $250,000. |
|
| D) | increase common shares by $400,000. |
| 54. | If the company declared a 15% stock dividend, the number of issued and outstanding shares would | |
|
| A) | remain unchanged. |
|
| B) | increase by 18,750 shares. |
|
| C) | decrease by 18,750 shares. |
|
| D) | total 143,700 shares. |
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Using QuickBooks Accountant 2018 For Accounting
Authors: Glenn Owen
16th Edition
9780357042083
