FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 21: Corporate Earnings and Capital Transactions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

True/False

Review LaterAdd Note

Review Later

The entry to record the declaration of a stock split includes a debit to Retained Earnings.

A) True
B) False

Correct Answer

verified

Show Answer

Question 42

Short Answer

Review LaterAdd Note

Review Later

The effect of an event or transaction that is infrequent in occurrence and highly unusual in nature is shown as a(n)--------on the income statement.

Correct Answer

verified

Show Answer

Question 43

Matching

Review LaterAdd Note

Match the description with correct term by entering the proper letter in the space provided.

A corporation paid estimated income taxes of $59,000 during 2019. At the end of the year, the corporation's tax bill is computed to be $70,000. Record the entry to adjust the Income Tax Expense account on page 6 of a general journal. Omit the description.

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

Which of the following statements is not correct?

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

Deferred income taxes arise because the taxable income of a corporation can differ from the net income reported on its financial statements.

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

The effect of issuing a stock dividend is to convert a portion of the corporation's---------- to permanent capital.

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

A corporation reported net income of $240,000 for its fiscal year and declared and paid cash dividends of $96,000. A stock dividend recorded at $36,000 was also distributed during the year. If the ending balance of the Retained Earnings account was $325,000, calculate the beginning balance in the Retained Earnings account.

A corporation had 60,000 shares of $8 par value common stock outstanding on November 1 with no preferred stock issued or outstanding. The company's retained earnings was $250,000 and total stockholders' equity was $800,000. 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 350 shares of stock prior to the declaration. After the stock dividend, the total book value of Lewis' stock after receiving additional shares was:

The entry to record the payment of a cash dividend includes a debit to Retained Earnings and a credit to Cash.

A corporation reported a net income of $82,000 for its fiscal year and declared and paid cash dividends of $51,000 and declared and distributed a stock dividend recorded at $35,000. If the ending balance of the Retained Earnings account was $210,000, the beginning balance was:

The entry to record the income tax payable would include debit to Retained Earnings and a credit to Income Tax Payable.

The formal method by which a company can restrict dividend distributions is called:

Cash dividends decrease total stockholder's equity but stock dividends have a net zero effect on total stockholder's equity.

A corporation paid estimated income taxes of $80,000 during 2019. At the end of the year, the corporation's tax bill is computed to be $100,000. Record the entry to adjust the Income Tax Expense account on page 6 of a general journal. Omit the description.

A corporation may report a net income amount for federal income tax purposes that differs from the amount reported for financial accounting purposes.