Question

cash dividends can be paid only when:

11. Cash dividends can be paid only when: A) the retained earnings account has a positive balance greater than the dividend. B) the cash account has a balance greater than the amount of the dividend declared. C) the board of directors has declared the dividend. D) all of the above. 12. On February 16, a company declares a 34€ dividend to be paid on April 5. There are 2 million shares of common stock outstanding and 100,000 shares of treasury stock. What does the company record in February? A) A debit to Dividends Payable and a credit to Cash, each for $714,000. B) A debit to Dividends Declared and a credit to Dividends Payable, each for $680.000. C) A debit to Dividends Payable and a credit to Cash, each for $680,000. D) A debit to Dividends Declared and a credit to Dividends Payable, each for $714,000. 13. The effect of a stock dividend is to: A) decrease total assets and stockholders' equity. B) change the composition of stockholders' equity. C) decrease total assets and total liabilities. D) increase the market value per share of common shares.

Answer 1

Page huis cash dividends is that boution of peost, I neerica is declared by the booked og directors to be paid as duidend to serareholders of company is return to their investment done. Thus fou declaring cash duidend, it is necessady that company should have their selamed. earnings balance greater then dier dend amant and also you that they must have cash balance Inoue than duidend amont company can pay only dvidend when it is declared by boand, f boand has not declare. dueidend, wo shareholder is eligible fou dividend. 10 Thus as peu above ufoumation: All of the above i cokeuct. - D