Question 1

At year-end, an adjusting entry is necessary to recognize the correct amount of income taxes the corporation must pay for the year.

Accepted Answer

A) True 
 B)False

Question 2

Match the terms with the definitions.
-A proportionate distribution of shares of a corporation's own stock to its stockholders.

Accepted Answer

A)  cash dividend
B)  date of declaration
C)  date of payment
D)  date of record
E)  dividendF) retained earnings appropriationG) retained earnings statementH) stock dividendI) stock splitJ) A) and D)
K) A) and E)

Question 3

Corporations are subject to specific corporate tax rates different from those for individuals.

Accepted Answer

A) True 
 B)False

Question 4

The owner of 100 shares of stock of a corporation with 2,000 shares of stock outstanding has a 5% interest in the total stockholders' equity. If a 20% stock dividend is declared and distributed, that stockholder would own which of the following number of shares?

Accepted Answer

A)   20
B)   100
C)   105
D)   120E) A) and B)
F) A) and C)

Question 5

Income taxes for a corporation are normally reported as a separate expense item on the income statement.

Accepted Answer

A) True 
 B)False

Question 6

The ending balance of the retained earnings account on the statement of retained earnings is the same amount that appears in the stockholders' equity section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 7

Match the terms with the definitions.
-The date on which the dividend is actually paid by the corporation.

Accepted Answer

A)  cash dividend
B)  date of declaration
C)  date of payment
D)  date of record
E)  dividendF) retained earnings appropriationG) retained earnings statementH) stock dividendI) stock splitJ) A) and G)
K) A) and E)

Question 8

A retained earnings appropriation is a restriction of retained earnings by

Accepted Answer

A)   the board of directors.
B)   stockholders.
C)   senior management.
D)   accountants.E) All of the above
F) B) and C)

Question 9

Dividends on different classes of capital stock should be accounted for separately.

Accepted Answer

A) True 
 B)False

Question 10

Match the terms with the definitions.
-The date on which the names of stockholders entitled to receive the dividend are determined.

Accepted Answer

A)  cash dividend
B)  date of declaration
C)  date of payment
D)  date of record
E)  dividendF) retained earnings appropriationG) retained earnings statementH) stock dividendI) stock splitJ) A) and C)
K) D) and G)

Question 11

When an appropriation of retained earnings is made, total retained earnings is decreased.

Accepted Answer

A) True 
 B)False

Question 12

Appropriation of retained earnings has been used primarily to limit the availability of retained earnings for paying stockholders' dividends.

Accepted Answer

A) True 
 B)False

Question 13

A corporation may issue a stock dividend for which of the following reasons?

Accepted Answer

A)   It may be short of cash and unable to pay a cash dividend.
B)   It may want to increase the marketability of its stock by raising the price per share.
C)   It may have a large debit balance in Retained Earnings and the directors may want to transfer part of this balance to the common stock account.
D)   It may want to increase the stockholders' ownership in the corporation.E) A) and D)
F) B) and D)

Question 14

Light Touch, Inc. has 110,000 shares of $8 par common stock outstanding. On July 1, the board of directors declared a two-for-one stock split. Prepare the memorandum entry in the general journal indicating the new par value and the total number of outstanding shares of common stock.

Accepted Answer

The answer of Light Touch, Inc. has 110,000 shares of...

Question 15

Prepare the journal entry for the following transaction.
Apr. 15
Last year, Titan Corporation's board of directors appropriated $150,000 for the purchase of a new storage facility over a three-year period. This year's appropriation for $50,000 was made on this datE.​

Accepted Answer

The answer of Prepare the journal entry for the following...

Question 16

The board of directors declared a $2 per share cash dividend on common stock and the corporation had 5,000 shares authorized and 4,000 shares outstanding. The entry required to record the declaration of dividends would be

Accepted Answer

A)   a debit to Cash and a credit to Common Dividends Payable.
B)   a debit to Common Dividends Payable and a credit to Cash.
C)   a debit to Retained Earnings and a credit to Common Dividends Payable.
D)   a debit to Cash Dividends and a credit to Common Dividends Payable.E) None of the above
F) B) and C)

Question 17

Santiago Corporation estimated at the beginning of 20-- that its income tax for the year would be $200,000. Calculate the estimated income tax per quarter and show one of the quarterly entries to pay the taxes.  As of December 31, 20-- Santiago Corporation had an actual tax liability of $200,437. Calculate the income tax due and make the necessary adjusting entry.

Accepted Answer

The answer of Santiago Corporation estimated at the beginning of...

Question 18

The board of directors declared a $2 per share cash dividend on common stock and the corporation had 5,000 shares authorized and 4,000 shares outstanding and make a journal entry. The journal entry for the dividend payment would be

Accepted Answer

A)   a debit to Cash Dividends for $8,000 and a credit to Common Dividends Payable for $8,000.
B)   a debit to Cash Dividends for $10,000 and a credit to Common Dividends Payable for $10,000.
C)   a debit to Cash Dividends Payable for $8,000 and a credit to Cash for $8,000.
D)   a debit to Cash Dividends Payable for $10,000 and a credit to Cash for $10,000.E) C) and D)
F) A) and B)

Question 19

In a corporation, the capital resulting from the retention of earnings is entered in the

Accepted Answer

A)   cash account.
B)   retained earnings account.
C)   paid-in capital account.
D)   income summary account.E) A) and B)
F) A) and C)

Question 20

Pippin Company has 70,000 shares of $14 par common stock outstanding. On July 1, the board of directors declared a two-for-one stock split. Prepare the memorandum entry in the general journal indicating the new par value and the total number of outstanding shares of common stock.

Accepted Answer

The answer of Pippin Company has 70,000 shares of $14...

Exam 21: Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

The owner of 100 shares of stock of a corporation with 2,000 shares of stock outstanding has a 5% interest in the total stockholders' equity. If a 20% stock dividend is declared and distributed, that stockholder would own which of the following number of shares?

Correct Answer
verified

A corporation may issue a stock dividend for which of the following reasons?

Correct Answer
verified

Income taxes for a corporation are normally reported as a separate expense item on the income statement.

Correct Answer
verified

Dividends on different classes of capital stock should be accounted for separately.

Correct Answer
verified

Correct Answer
verified

Match the terms with the definitions. -A proportionate distribution of shares of a corporation's own stock to its stockholders.

Correct Answer
verified

At year-end, an adjusting entry is necessary to recognize the correct amount of income taxes the corporation must pay for the year.

Correct Answer
verified

Corporations are subject to specific corporate tax rates different from those for individuals.

Correct Answer
verified

The board of directors declared a $2 per share cash dividend on common stock and the corporation had 5,000 shares authorized and 4,000 shares outstanding and make a journal entry. The journal entry for the dividend payment would be

Correct Answer
verified

The board of directors declared a $2 per share cash dividend on common stock and the corporation had 5,000 shares authorized and 4,000 shares outstanding. The entry required to record the declaration of dividends would be

Correct Answer
verified

Match the terms with the definitions. -The date on which the names of stockholders entitled to receive the dividend are determined.

Correct Answer
verified

Pippin Company has 70,000 shares of $14 par common stock outstanding. On July 1, the board of directors declared a two-for-one stock split. Prepare the memorandum entry in the general journal indicating the new par value and the total number of outstanding shares of common stock.

Correct Answer
verified

Match the terms with the definitions. -The date on which the dividend is actually paid by the corporation.

Correct Answer
verified

Light Touch, Inc. has 110,000 shares of $8 par common stock outstanding. On July 1, the board of directors declared a two-for-one stock split. Prepare the memorandum entry in the general journal indicating the new par value and the total number of outstanding shares of common stock.

Correct Answer
verified

The ending balance of the retained earnings account on the statement of retained earnings is the same amount that appears in the stockholders' equity section of the balance sheet.

Correct Answer
verified

Appropriation of retained earnings has been used primarily to limit the availability of retained earnings for paying stockholders' dividends.

Correct Answer
verified

In a corporation, the capital resulting from the retention of earnings is entered in the

Correct Answer
verified

A retained earnings appropriation is a restriction of retained earnings by

Correct Answer
verified

Prepare the journal entry for the following transaction. Apr. 15 Last year, Titan Corporation's board of directors appropriated $150,000 for the purchase of a new storage facility over a three-year period. This year's appropriation for $50,000 was made on this datE.

Correct Answer
verified

When an appropriation of retained earnings is made, total retained earnings is decreased.

Correct Answer
verified

Exam 21: Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

The owner of 100 shares of stock of a corporation with 2,000 shares of stock outstanding has a 5% interest in the total stockholders' equity. If a 20% stock dividend is declared and distributed, that stockholder would own which of the following number of shares?

Correct AnswerverifiedShow Answer

A corporation may issue a stock dividend for which of the following reasons?

Correct AnswerverifiedShow Answer

Income taxes for a corporation are normally reported as a separate expense item on the income statement.

Correct AnswerverifiedShow Answer

Dividends on different classes of capital stock should be accounted for separately.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Match the terms with the definitions. -A proportionate distribution of shares of a corporation's own stock to its stockholders.

Correct AnswerverifiedShow Answer

At year-end, an adjusting entry is necessary to recognize the correct amount of income taxes the corporation must pay for the year.

Correct AnswerverifiedShow Answer

Corporations are subject to specific corporate tax rates different from those for individuals.

Correct AnswerverifiedShow Answer

The board of directors declared a $2 per share cash dividend on common stock and the corporation had 5,000 shares authorized and 4,000 shares outstanding and make a journal entry. The journal entry for the dividend payment would be

Correct AnswerverifiedShow Answer

The board of directors declared a $2 per share cash dividend on common stock and the corporation had 5,000 shares authorized and 4,000 shares outstanding. The entry required to record the declaration of dividends would be

Correct AnswerverifiedShow Answer

Match the terms with the definitions. -The date on which the names of stockholders entitled to receive the dividend are determined.

Correct AnswerverifiedShow Answer

Pippin Company has 70,000 shares of $14 par common stock outstanding. On July 1, the board of directors declared a two-for-one stock split. Prepare the memorandum entry in the general journal indicating the new par value and the total number of outstanding shares of common stock.

Correct AnswerverifiedShow Answer

Match the terms with the definitions. -The date on which the dividend is actually paid by the corporation.

Correct AnswerverifiedShow Answer

Light Touch, Inc. has 110,000 shares of $8 par common stock outstanding. On July 1, the board of directors declared a two-for-one stock split. Prepare the memorandum entry in the general journal indicating the new par value and the total number of outstanding shares of common stock.

Correct AnswerverifiedShow Answer

The ending balance of the retained earnings account on the statement of retained earnings is the same amount that appears in the stockholders' equity section of the balance sheet.

Correct AnswerverifiedShow Answer

Appropriation of retained earnings has been used primarily to limit the availability of retained earnings for paying stockholders' dividends.

Correct AnswerverifiedShow Answer

In a corporation, the capital resulting from the retention of earnings is entered in the

Correct AnswerverifiedShow Answer

A retained earnings appropriation is a restriction of retained earnings by

Correct AnswerverifiedShow Answer

Prepare the journal entry for the following transaction. Apr. 15 Last year, Titan Corporation's board of directors appropriated $150,000 for the purchase of a new storage facility over a three-year period. This year's appropriation for $50,000 was made on this datE.​

Correct AnswerverifiedShow Answer

When an appropriation of retained earnings is made, total retained earnings is decreased.

Correct AnswerverifiedShow Answer

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Correct Answer
verified

Prepare the journal entry for the following transaction. Apr. 15 Last year, Titan Corporation's board of directors appropriated $150,000 for the purchase of a new storage facility over a three-year period. This year's appropriation for $50,000 was made on this datE.

Correct Answer
verified

Correct Answer
verified