Initial Quiz ch 14

Blanco, Inc. has a net income of $300,000 for 2017, and there are 200,000 weighted-average shares of common stock outstanding. Dividends declared and paid during the year amounted to $40,000 on the preferred stock and $60,000 on the common stock. The earnings per share for 2017 is

1.30

Bento, Inc. had 500,000 shares of common stock outstanding before a stock split occurred, and 1,500,000 shares outstanding after the stock split. The stock split was

3-for-1. $1,500,000 / $500,000 = 3

Prior period adjustments Prior period adjustments are reported

Current year's retained earnings include: on the current year's retained earnings statement.

Regular dividends are declared out of

Retained Earnings

If a corporation declares a 10% stock dividend on its common stock, the account to be debited on the date of declaration is

Stock Dividends.

A net loss

expenses exceeds revenue

A corporation is not committed to a legal obligation when it declares

increase the marketability of the stock.

Corporations generally issue stock dividends in order to

increase the marketability of the stock.

Paiva Corporation splits its common stock 2 for 1, when the market value is $80 per share. Prior to the split, Paiva had 100,000 shares of $10 par value common stock issued and outstanding. After the split, the par value of the stock

is reduced to $5 per share. $10 / 2 = $5

A stock split

may occur in the absence of retained earnings