AC 210 Chapter 11

A stock dividend_____ decreases cash decreases Retained Earnings decreases total stockholders' equity increases Common Stock has no effect on total stockholders' equity

decreases Retained Earnings increases Common Stock has no effect on total stockholders' equity

# of shares outstanding=

issued shares - shares of treasury stock

T or F: No gain or loss is reported when treasury stock is reissued

True

Preferred stock carries priority over common stock ________ only when dividends are declared and paid both for dividends and at liquidation only when a corporation is liquidated

both for dividends and at liquidation

Company bought 1,000 shares of its own stock for $8,000. Later it re-issued the shares for $10,000. The journal entry to record the sale of treasury stock includes a(n)______ $2,000 credit to Additional Paid-in Capital $8,000 credit to Treasury Stock $10,000 credit to Treasury Stock $2,000 debit to Additional Paid-in Capital $ 10,000 debit to Treasury Stock

$2,000 credit to Additional Paid-in Capital $8,000 credit to Treasury Stock

Canton Inc. issued 10,000 shares of 1$ par value common stock at $10 per share. Mr. Smart the bookkeeper, recorded this transaction with a $100,000 debit to cash and a $100,000 credit to common stock. As a result of this entry_______ Common stock will be overstated total stockholders equity will be overstated total assets will be overstated total stockholders' equity will be understated Additional paid-in capital will be understated

Common stock will be overstated Additional paid-in capital will be understated

Accumulated Deficit________ indicates that no dividends have been declared means that Retained earnings has a credit balance means that Retained earnings has a debit balance indicates accumulated net losses is shown in parenthesis on the balance sheet

means that Retained earnings has a debit balance indicates accumulated net losses is shown in parenthesis on the balance sheet

Contributed capital of $1,000,000 is found in the ________ section of the _______ stockholders equity; balance sheet retained earnings; income statement retained earnings; balance sheet stockholders equity; income statement

stockholders equity; balance sheet

issuing 1,000 shares of 5%, $100 par value, cumulative preferred stock for $110 in cash per share affects the accounting equation by________ increasing total liabilities increasing Additional Paid-in Capital increasing Assets increasing Retained Earnings decreasing total stockholders' equity increasing total stockholders' equity

increasing Additional Paid-in Capital increasing Assets increasing total stockholders' equity

Issuing 1,000 shares of 5%, $100 par value, cumulative preferred stock for $100 cash per share affects the accounting equation by______ increasing total stockholders equity increasing total liabilities increasing Retained Earnings decreasing total stockholders equity increasing total assets increasing Additional Paid-in Capital

increasing total stockholders equity increasing total assets

Treasury stock represents_______ the amount paid to acquire US treasury stock stock issued in exchange for treasury bills a contra-equity account the amount paid for stock reacquired and currently held in treasury

the amount paid for stock reacquired and currently held in treasury

Company issued 10,000 shares of $1 par value common stock at $10 per share. The journal entry to record this transaction includes a__________ $10,000 debit to Cash $100,000 debit to Cash $100,000 credit to Common Stock $90,000 credit to Additional Paid-in Capital $10,000 credit to Common Stock

$100,000 debit to Cash $90,000 credit to Additional Paid-in Capital $10,000 credit to Common Stock

prior to a $4,000 stock dividend, total stockholders equity equaled $50,000. After the stock dividend, total stockholders equity equals________ $46,000 $52,000 $48,000 $54,000 $50,000

$50,000

Wok N Roll, inc. began on January 1, 2017 by issuing 100,000 shares of $1 par value common stock and 1,000 shares of $100 par value, 5% cumulative preferred stock. No dividends were declared in 2017 or 2018. in 2019, Wok N Roll declared and paid $.50 dividend to its common stockholders. Assuming all shares originally issued are outstanding, the total dividend declared and paid in 2019 equals________ $65,000 $50,500 $50,000 $55,000

$65,000

Retained Earnings are______ increased by net income decreased by dividends sometimes called earned capital decreased by purchase of land all of company's earnings kept rather than distributed to stockholders equal to cash

increased by net income decreased by dividends sometimes called earned capital all of company's earnings kept rather than distributed to stockholders

Corporations will declare stock dividends (or stock split) in order to________ increase to corporation's retained earnings increase the market price of a share of stock to help maximize the stockholders' wealth increase a stockholders a stockholders' ownership percentage in the corporation reduce the market price of a share of stock and make it more attractive to some investors

reduce the market price of a share of stock and make it more attractive to some investors

Contributed capital of $1,000,000 represents________ the accumulated profits earned on stockholders' investment donations received from creditors the amount stockholders have invested in exchange for stock accumulated earnings minus accumulated dividends

the amount stockholders have invested in exchange for stock

1)Declaration Date 2)Date of record 3)Payment date

1)The board of directors officially approves a dividend 2)Stock records are finalized to determine which stockholders are to receive payment 3)Dividends payable is decreased

Journal entry to record the declaration of a dividend includes________ credit to Dividends credit to Retained Earnings debit to Dividends credit to Cash credit to Dividends Payable

debit to Dividends credit to Dividends Payable