need answered

16.       Stock dividends and stock splits have the following effects on retained earnings:

        Stock Splits         Stock Dividends

a.       Increase                 No change

b.      Decrease                 Decrease

c.     No change               No change

d.     No change                Decrease

 

 

 

17.       Somento Forest Inc. has 10,000 shares of 6%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2014. What is the annual dividend on the preferred stock?

a.   $60 per share

b.   $60,000 in total

c.   $100,000 in total

d.   $0.60 per share

 

 

 

18.       A prior period adjustment that corrects income of a prior period requires that an entry be made to

a.   an income statement account.

b.   the retained earnings account.

c.   a current year revenue or expense account.

d.   an asset account.

 

19.       The following selected amounts are available for Vizio Company.

            Retained earnings (beginning)             $1,600

            Net loss                                                     300

            Cash dividends declared                          200

            Stock dividends declared                         200

What is its ending retained earnings balance?

a.    $1,300

b.    $900

c.   $1,400

d.   $1,200

 

 

 

20.       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

a.   2-for-5.

b.   5-for-1.

c.   3-for-1

d.   1-for-5.

 

 

 

 

 

PROBLEM 1

On January 1, 2010, Anderson Corporation had 60,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred:

Mar.      1      Issued 30,000 shares of common stock for $400,000.

June     1      Declared a cash dividend of $1.50 per share to stockholders of record on June 15.

June   30      Paid the $1.50 cash dividend.

Dec.     1      Purchased 10,000 shares of common stock for the treasury for $20 per share.

Dec.    15     Declared a cash dividend on outstanding shares of $2 per share to stockholders     of record on December 31.

Instructions

Prepare journal entries to record the above transactions. Use the template below.

 

 

 

 

 

Date

Account

Debit

Credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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PROBLEM 2

 

 

The following information is available for Grey Goose Inc.:

Beginning retained earnings                                             $600,000

Cash dividends declared                                                      40,000

Net income for 2014                                                           100,000

Stock dividend declared                                                       10,000

Understatement of last year’s depreciation expense           20,000

 

Instructions

Based on the preceding information, prepare a retained earnings statement for 2014 in the box below.

 

 

GREY GOOSE INC.

Retained Earnings Statement

For the Year Ended December 31, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
 
 

 

PROBLEM 3

 

Timber Ridge Corporation was organized on January 1, 2013. During its first year, the corporation issued 40,000 shares of $5 par value preferred stock and 400,000 shares of $1 par value common stock. At December 31, the company declared the following cash dividends:

 

                        2013                            $ 7,000

                        2014                            $30,000

                        2015                            $70,000

 

Instructions

(a)   Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 5% and not cumulative.

(b)   Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 6% and cumulative.

 

c)    Journalize the declaration of the cash dividend at December 31, 2015

 

 

(a)                              Preferred               Common                  Total  

         2013                                                                                          

         2014                                                                                          

         2015

 

                                                                             

 

(b)                              Preferred               Common                  Total  

         2013                                                         

         2014                                                            

         2015      

 

 

 

(c)

Date

Account

Debit

Credit