acc ch14

Sheffield, Inc., has 5100 shares of 5%, $100 par value, cumulative preferred stock and 40800 shares of $1 par value common stock outstanding from December 31, 2018 through Dec. 31, 2020. There were no dividends declared in 2018. The board of directors declares and pays a $46400 dividend in 2019 and in 2020. What is the amount of dividends received by the common stockholders in 2020? $16300 $46400 $25500 $0

$16300

Sheffield Inc. declared a $81500 cash dividend. It currently has 3300 shares of 6%, $100 par value cumulative preferred stock outstanding. It is one year in arrears on its preferred stock. How much cash will Sheffield distribute to the common stockholders? $41900. $39600. $61700. None of these answers are correct.

$41900.

Waterway, Inc., has 5300 shares of 4%, $100 par value, noncumulative preferred stock and 42400 shares of $1 par value common stock outstanding at December 31, 2020. There were no dividends declared in 2019. The board of directors declares and pays a $65500 dividend in 2020. What is the amount of dividends received by the common stockholders in 2020? $44300 $7950 $0 $21200

$44300

On December 31, 2020, Sunland, Inc. has 3600 shares of 4% $100 par value cumulative preferred stock and 60900 shares of $10 par value common stock outstanding. On December 31, 2020, the directors declare a $20500 cash dividend. The entry to record the declaration of the dividend would include: -a debit of $20500 to Common Stock. -a credit of $20500 to Dividends Payable. -a note in the financial statements that dividends of $2 per share are in arrears on preferred stock for 2020. -a credit of $20500 to Cash Dividends.

a credit of $20500 to Dividends Payable.

Common Stock Dividends Distributable is classified as a(n) stockholders' equity account. liability account. expense account. asset account.

stockholders' equity account.

Which of the following statements about dividends is not accurate? The board of directors is obligated to declare dividends. Low dividends may mean high stock returns. A legal dividend may not be a feasible one. Many companies declare and pay cash quarterly dividends.

The board of directors is obligated to declare dividends.

Which of the following statements regarding the date of a cash dividend declaration is not accurate? The corporation is committed to a legal, binding obligation. A liability account must be increased. The board of directors formally authorizes the cash dividend. The dividend can be rescinded once it has been declared.

The dividend can be rescinded once it has been declared.

Outstanding stock of the Coronado Corporation included 40100 shares of $5 par common stock and 20050 shares of 5%, $10 par noncumulative preferred stock. In 2019, Coronado declared and paid dividends of $7300. In 2020, Coronado declared and paid dividends of $23200. How much of the 2020 dividend was distributed to preferred shareholders? $14035 $7300 $10025 None of these answer choices are correct

$10025

Bramble, Inc. has 3500 shares of 6%, $50 par value, cumulative preferred stock and 70000 shares of $1 par value common stock outstanding at December 31, 2019. The board of directors declared and paid a $10000 dividend in 2019. In 2020, $28400 of dividends are declared and paid. What are the dividends received by the preferred and common shareholders in 2020? Preferred Common $14200 $14200 $11000 $17400 $10500 $17900 $17400 $11000

$11000 $17400

Sheridan Inc., has 2700 shares of 5%, $50 par value, cumulative preferred stock and 100000 shares of $1 par value common stock outstanding at December 31, 2019, and December 31, 2020. The board of directors declared and paid a $4000 dividend in 2019. In 2020, $23800 of dividends are declared and paid. What are the dividends received by the common stockholders in 2020? $14300 $9500 $6750 $13500

$14300

Waterway, Inc. has 6500 shares of 6%, $100 par value, noncumulative preferred stock and 13000 shares of $1 par value common stock outstanding at December 31, 2020. There were no dividends declared in 2019. The board of directors declares and pays a $64700 dividend in 2020. What is the amount of dividends received by the common stockholders in 2020? $39000 $64700 $25700 $0

$25700

Marigold, Inc. has 1010 shares of 5%, $10 par value, cumulative preferred stock and 60100 shares of $1 par value common stock outstanding at December 31, 2020. What is the annual dividend on the preferred stock? $5050 in total $505 in total $5 per share $0.05 per share

$505 in total

Sheffield Inc., has 1500 shares of 6%, $50 par value, cumulative preferred stock and 99700 shares of $1 par value common stock outstanding at December 31, 2020, and December 31, 2019. The board of directors declared and paid a $3600 dividend in 2019. In 2020, $25100 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2020? $5400 $12550 $19700 $4500

$5400

Concord, Inc. has 11300 shares of 5%, $100 par value, noncumulative preferred stock and 113000 shares of $1 par value common stock outstanding at December 31, 2019, and December 31, 2020. The board of directors declared and paid a $50100 dividend in 2019. In 2020, $110700 of dividends are declared and paid. What are the dividends received by the preferred and common shareholders in 2020? Preferred Common $0 $110700 $59200 $51500 $56500 $54200 $55350 $55350

$56500 $54200

Swifty Inc. has 10700 shares of 6%, $100 par value, cumulative preferred stock and 104700 shares of $1 par value common stock outstanding at December 31, 2020. What is the annual dividend on the preferred stock? $59 per share $0.61 per share $104700 in total $64200 in total

$64200 in total

Outstanding stock of the Sheffield Corporation included 43200 shares of $5 par common stock and 10000 shares of 7%, $10 par noncumulative preferred stock. In 2019, Sheffield declared and paid dividends of $3700. In 2020, Sheffield declared and paid dividends of $12000. How much of the 2020 dividend was distributed to preferred shareholders? $8000 $5000 $7000 None of these answer choices are correct

$7000

Which one of the following is not necessary in order for a corporation to pay a cash dividend? Declaration of dividends by the board of directors Adequate cash Retained earnings Approval of stockholders

Approval of stockholders

Which one of the following events would not require a formal journal entry on a corporation's books? 2% stock dividend $1 per share cash dividend 2-for-1 stock split 100% stock dividend

2-for-1 stock split

When stock dividends are distributed, -no entry is necessary if it is a large stock dividend. -Paid-in Capital in Excess of Par is debited if it is a small stock dividend. -Retained Earnings is decreased. -Common Stock Dividends Distributable is decreased.

Common Stock Dividends Distributable is decreased.

On January 1, Vaughn Corporation had 1980000 shares of $10 par value common stock outstanding. On March 31, the company declared a 20% stock dividend. Market value of the stock was $16/share. As a result of this event, -Vaughn's Paid-in Capital in Excess of Par account increased $2376000. -Vaughn's total stockholders' equity was unaffected. -Vaughn's Stock Dividends account increased $6336000. -All of these answer choices are correct.

All of these answer choices are correct.

The effect of the declaration of a cash dividend by the board of directors is to Increase Decrease Liabilities Assets Liabilities Stockholders' equity Assets Liabilities Stockholders' equity Assets

Liabilities Stockholders' equity

On January 1, Marigold Corporation had 1400000 shares of $10 par value common stock outstanding. On March 31, the company declared a 20% stock dividend. Market value of the stock was $20/share. As a result of this event, -Marigold's Paid-in Capital in Excess of Par account increased $2800000. -Marigold's total stockholders' equity was unaffected. -Marigold's Stock Dividends account increased $5600000. -All of these answer choices are correct.

Marigold's total stockholders' equity was unaffected.

Stock dividends and stock splits have the following effects on retained earnings: Stock Splits Stock Dividends No change No change Decrease Decrease Increase No change No change Decrease

No change Decrease

Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections: Total Assets Total Liabilities Total Stockholders' Equity Increase Decrease No change Decrease No change Increase Decrease Increase Decrease No change Increase Decrease

No change Increase Decrease

Identify the effect the declaration and distribution of a stock dividend has on the par value per share. Decrease Increase or decrease No effect Increase

No effect

Which of the following show the proper effect of a stock split and a stock dividend? Item Stock Split Stock Dividend Total paid-in capital Increase Increase Par value per share Decrease No change Total retained earnings Decrease Decrease Total par value (common) Decrease Increase

Par value per share Decrease No change

Regular dividends are declared out of Paid-in Capital in Excess of Par. Common Stock. Treasury Stock. Retained Earnings.

Retained Earnings.

Each of the following decreases total stockholders' equity except a cash dividend. liquidating dividend. stock dividend. all of these decrease total stockholders' equity.

stock dividend.

On January 1, Concord Corporation had 172000 shares of $10 par value common stock outstanding. On June 17, the company declared a 11% stock dividend to stockholders of record on June 20. Market value of the stock was $11 on June 17. The stock was distributed on June 30. The entry to record the transaction of June 30 would include a credit to Common Stock for $189200. credit to Paid-in Capital in Excess of Par for $18920. debit to Stock Dividends for $208120. debit to Common Stock Dividends Distributable for $208120.

credit to Common Stock for $189200.

If a stockholder receives a dividend that reduces retained earnings by the fair value of the stock, the stockholder has received a cash dividend. contingent dividend. large stock dividend. small stock dividend.

small stock dividend.

Of the various dividends types, the two most common types in practice are cash and large stock. cash and small stock. cash and property. property and small stock.

cash and small stock.

Dividends are predominantly paid in property. earnings. stock. cash.

cash.

The effect of a stock dividend is to increase the book value per share of common stock. change the composition of stockholders' equity. decrease total assets and total liabilities. decrease total assets and stockholders' equity.

change the composition of stockholders' equity.

Dividends Payable is classified as a long-term liability. current liability. stockholders' equity account. contra stockholders' equity account to Retained Earnings.

current liability.

On January 1, Bonita Corporation had 144000 shares of $10 par value common stock outstanding. On June 17, the company declared a 12% stock dividend to stockholders of record on June 20. Market value of the stock was $12 on June 17. The entry to record the transaction of June 17 would include a debit to Stock Dividends for $207360. credit to Common Stock Dividends Distributable for $207360. credit to Common Stock Dividends Distributable for $69120. credit to Cash for $207360.

debit to Stock Dividends for $207360.

The date on which a cash dividend becomes a binding legal obligation is on the payment date. declaration date. date of record. last day of the fiscal year-end.

declaration date.

The cumulative effect of the declaration and distribution of a stock dividend on a company's balance sheet is to increase assets and stockholders' equity. decrease current liabilities and stockholders' equity. decrease paid-in capital and stockholders' equity. decrease retained earnings and increase paid-in capital.

decrease retained earnings and increase paid-in capital.

The payment of a dividend does not require a journal entry. decreases current assets and current liabilities. decreases stockholders' equity and total assets. decreases stockholders' equity and increases liabilities.

decreases current assets and current liabilities.

The declaration and distribution of a stock dividend will decrease total assets. increase total assets. increase total stockholders' equity. have no effect on total assets.

have no effect on total assets.

The declaration of a stock dividend will increase total liabilities. change the total of stockholders' equity. increase total assets. increase paid-in capital.

increase paid-in capital.

Corporations generally issue stock dividends in order to increase the market price per share. increase the marketability of the stock. exceed stockholders' dividend expectations. decrease the amount of capital in the corporation.

increase the marketability of the stock.

Under IFRS, retained profits may be used to describe retained earnings. prior period adjustments. profit and loss. net income.

retained earnings.

A small stock dividend is defined as less than 20-25% of the corporation's issued stock. more than 30% of the corporation's issued stock. less than 30% but greater than 25% of the corporation's issued stock. between 50% and 100% of the corporation's issued stock.

less than 20-25% of the corporation's issued stock.

Each of the following decreases retained earnings except a cash dividend. liquidating dividend. stock dividend. all of these decrease retained earnings.

liquidating dividend.

If a corporation declares a dividend based upon paid-in capital, it is known as a property dividend. paid dividend. scrip dividend. liquidating dividend.

liquidating dividend.

On the dividend record date, an entry may be required if it is a stock dividend. dividends Payable is debited. no entry is required. a dividend becomes a current obligation.

no entry is required.

Crane, Inc. has 9000 shares of 6%, $100 par value, cumulative preferred stock and 90000 shares of $1 par value common stock outstanding at December 31, 2020. If the board of directors declares a $30000 dividend, the -preferred shareholders will receive 1/10th of what the common shareholders will receive. -preferred shareholders will receive the entire $30000. -$30000 will be held as restricted retained earnings and paid out at some future date. -preferred shareholders will receive $15000 and the common shareholders will receive $15000.

preferred shareholders will receive the entire $30000.

Swifty, Inc., has 6500 shares of 5%, $100 par value, noncumulative preferred stock and 65000 shares of $1 par value common stock outstanding at December 31, 2020. If the board of directors declares a $100500 dividend, the -preferred stockholders will receive 1/10th of what the common stockholders will receive. -preferred stockholders will receive the entire $100500. -$32500 will be held as restricted retained earnings and paid out at some future date. -preferred stockholders will receive $32500 and the common stockholders will receive $68000.

preferred stockholders will receive $32500 and the common stockholders will receive $68000.

The per share amount normally assigned by the board of directors to a small stock dividend is the par or stated value of the stock. the market value of the stock on the date of declaration. zero. the average price paid by stockholders on outstanding shares.

the market value of the stock on the date of declaration.

The per share amount normally assigned by the board of directors to a large stock dividend is zero. the market value of the stock on the date of declaration. the par or stated value of the stock. the average price paid by stockholders on outstanding shares.

the par or stated value of the stock.