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ch15.doc-CHAPTER 15 STOCKHOLDERS’ EQUITY IFRS ques...
ch15.doc-CHAPTER 15 STOCKHOLDERS’ EQUITY IFRS questions
ch15.doc-CHAPTER 15 STOCKHOLDERS’ E...
ch15.doc-CHAPTER 15 STOCKHOLDERS’ EQUITY IFRS questions
Page 22
Test Bank for Intermediate Accounting, Thirteenth Edition
95.
Hernandez Company has 350,000 shares of $10 par value common stock outstanding.
During the year, Hernandez declared a 10% stock dividend when the market price of the
stock was $30 per share. Four months later Hernandez declared a $.50 per share cash
dividend. As a result of the dividends declared during the year, retained earnings
decreased by
a.
$1,242,500.
b.
$525,000.
c.
$192,500.
d.
$175,000.
96.
On June 30, 2010, when Ermler Co.'s stock was selling at $65 per share, its capital
accounts were as follows:
Capital stock (par value $50; 60,000 shares issued)
$3,000,000
Premium on capital stock
600,000
Retained earnings
4,200,000
If a 100% stock dividend were declared and distributed, capital stock would be
a.
$3,000,000.
b.
$3,600,000.
c.
$6,000,000.
d.
$7,800,000.
97.
The stockholders' equity section of Gunkel Corporation as of December 31, 2010, was as
follows:
Common stock, par value $2; authorized 20,000 shares;
issued and outstanding 10,000 shares
$
20,000
Paid-in capital in excess of par
30,000
Retained earnings
75,000
$125,000
On March 1, 2011, the board of directors declared a 15% stock dividend, and accordingly
1,500 additional shares were issued. On March 1, 2011, the fair market value of the stock
was $6 per share. For the two months ended February 28, 2011, Gunkel sustained a net
loss of $10,000.
What amount should Gunkel report as retained earnings as of March 1, 2011?
a.
$56,000.
b.
$62,000.
c.
$66,000.
d.
$72,000.
15 - 22
Page 23
Stockholders’ Equity
98.
The stockholders' equity of Howell Company at July 31, 2010 is presented below:
Common stock, par value $20, authorized 400,000 shares;
issued and outstanding 160,000 shares
$3,200,000
Paid-in capital in excess of par
160,000
Retained earnings
650,000
$4,010,000
On August 1, 2010, the board of directors of Howell declared a 15% stock dividend on
common stock, to be distributed on September 15th. The market price of Howell's
common stock was $35 on August 1, 2010, and $38 on September 15, 2010. What is the
amount of the debit to retained earnings as a result of the declaration and distribution of
this stock dividend?
a.
$800,000.
b.
$840,000.
c.
$912,000.
d.
$600,000.
99.
On January 1, 2010, Dodd, Inc., declared a 10% stock dividend on its common stock
when the market value of the common stock was $20 per share. Stockholders' equity
before the stock dividend was declared consisted of:
Common stock, $10 par value, authorized 200,000 shares;
issued and outstanding 120,000 shares
$1,200,000
Additional paid-in capital on common stock
150,000
Retained earnings
700,000
Total stockholders' equity
$2,050,000
What was the effect on Dodd’s retained earnings as a result of the above transaction?
a.
$120,000 decrease
b.
$240,000 decrease
c.
$400,000 decrease
d.
$200,000 decrease
100.
On January 1, 2010, Culver Corporation had 110,000 shares of its $5 par value common
stock outstanding. On June 1, the corporation acquired 10,000 shares of stock to be held
in the treasury. On December 1, when the market price of the stock was $8, the
corporation declared a 10% stock dividend to be issued to stockholders of record on
December 16, 2010. What was the impact of the 10% stock dividend on the balance of the
retained earnings account?
a.
$50,000 decrease
b.
$80,000 decrease
c.
$88,000 decrease
d.
No effect
15 - 23
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