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Exam 21: Corporate Earnings and Capital Transactions

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Question 21

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Although the balance of the Retained Earnings account is decreased,a(n)____________________ dividend will not result in a decrease in total stockholders' equity.

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Question 22

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The Dividends Payable accounts appear on the balance sheet as a current liability.

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B) False

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Question 23

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After all revenue and expense accounts,other than Income Tax Expense,have been extended to the Income Statement section of the worksheet of Genexo Corporation,the net income is determined to be $200,000.Using the following corporate income tax rates,compute the corporation's federal income taxes payable.(Assume that the firm's taxable income is the same as its income for financial accounting purposes. )

The Retained Earnings Appropriated-Treasury Stock account is shown in the ____________________ section of the balance sheet.

The entry to record the distribution of a stock dividend includes a credit to Common Stock Dividend Distributable.

Which of the following statements is not correct?

An appropriation of retained earnings reduces the amount of retained earnings available for dividend declarations.

A corporation had 50,000 shares of $20 par value common stock outstanding on November 1 with no preferred stock issued or outstanding.The company's retained earnings was $200,000 and total stockholders' equity was $500,000.Later that day,the board declared a 10% stock dividend when the market value of each share was $25.Shortly after declaration,the market value fell to $22.50 per share.Sam Lewis owned 200 shares of stock prior to the declaration.After the stock dividend,the total book value of Lewis' stock after receiving additional shares was:

When a previously declared stock dividend is distributed,the accountant makes an entry debiting Common Stock Dividend Distributable and crediting ___________________.

Treasury Stock is often purchased for all of the following reasons except:

On the worksheet for the current year ended Dec 31,column totals in the Income Statement section are debit,$220,000 and credit $285,000.Assuming income and deductions for tax purposes are the same as those for financial reporting and the company has paid estimated taxes of $10,000 to date.Tax rates remain 15% for the first $50,000;25% on the next 25,000;34% on the next $25,000 and 39% on the excess over $100,000.Prepare the adjusting entry for income taxes.

A corporation reported a net income of $120,000 for its fiscal year and declared and paid cash dividends of $60,000.A stock dividend recorded at $40,000 was also distributed during the year.If the ending balance of the Retained Earnings account was $200,000,the beginning balance was

____________,represents the amount of capital acquired from capital stock transactions and is another name for contributed capital.

The Deferred Income Tax account represents postponement of taxes payable to a future period.

The declaration of a cash dividend will result in a decrease in:

A corporation has paid estimated income taxes of $89,800 during the year 2016.At the end of the year,the corporation's tax bill is computed to be $83,000.Record the entry to adjust the Income Tax Expense account on page 6 of a general journal.Omit the description.

A 3-for-2 stock split will triple the reported dollar amount of stockholders' equity.

Company covenants (contracts,borrowing arrangements)may prevent the company from distributing profits to its shareholders.

To be entitled to receive a cash dividend,an investor must be listed as an owner of the stock on the ____________________ date.

The Stockholders' Equity section of the balance sheet reports contributed capital separate from corporate retained earnings.