1. Restrictions on retained earnings include all but which of the following characteristics?
a) A restriction on retained earnings means a reduction in the power to declare dividends.
b) A journal entry must be made to indicate such a restriction.
c) Restrictions on retained earnings must be disclosed in the notes to the financial statements.
d) Only a portion of retained earnings may be restricted.
2. Cambridge Corp. declared a 5% stock dividend. Will Wales owned 300 shares of Cambridge before the dividend. Cambridge shares were trading at $21 before the dividend. Which of the following will be true after the dividend is distributed?
a) Fewer investors will be able to buy Cambridge shares.
b) The total market value of Will’s shares was $6,300 before the stock dividend but will probably decrease after the stock dividend.
c) Will owned 300 shares before the stock dividend and 315 shares after the stock dividend.
d) The total market value of Will’s shares was $6,300 before the stock dividend and $6,615 after the stock dividend.
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1. Restrictions on retained earnings include all but which of
the following characteristics?
a) A restriction...
Cambridge Corp. declared a 5% stock dividend. Will Wales owned 300 shares of Cambridge before the...
Cambridge Corp. declared a 5% stock dividend. Will Wales owned 300 shares of Cambridge before the dividend. Cambridge shares were trading at $21 before the dividend. Which of the following will be true after the dividend is distributed? The total market value of Will's shares was $6,300 before the stock dividend but will probably decrease after the stock dividend. The total market value of Will's shares was $6,300 before the stock dividend and $6,615 after the stock dividend. Will owned...
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Cambridge Corp. declared a 5% stock dividend. Will Wales owned 300 shares of Cambridge before the dividend. Cambridge shares were trading at $21 before the dividend. Which of the following will be true after the dividend is distributed? The total market value of Will's shares was $6,300 before the stock dividend but will probably decrease after the stock dividend. The total market value of Will's shares was $6,300 before the stock dividend and $6,615 after the stock dividend. Will owned...
Restrictions on Retained Earnings At December 31, 2010, Longfellow Clothing had $226,700 of retained earnings, all unrestricted. During 2011, Longfellow earned net income of $92,000 and declared and paid cash dividends on comman stock of $21,800. During 2011, Longfellow sold a bond issue with a covenant that required Longfellow to transfer from retained earnings to restricted retained earnings an amount equal to the principal of the bond issue, $48,000. At December 31, 2011, Long-fellow has 30,000 shares of $5 par...
Nummet, Financial Accounting, Be Help System Announcements CALCULATOR PRINTER VERSION BACK par) $1,104,000 and retained earnings $460,000. A 10% stock dividend (13,800 shares) Brief Exercise 11-6 The stockholders' equity section of Blue Spruce Corps balance sheet consists of common stock ( declared when the market price per share is $18. (a) Show the before and after effects of the dividend on the components of stockholders' equity. Before Dividend After Dividend Stockholders' Equity Paid-in Capital Common Stock 2104000 Paid in Capital...
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