which of the following actions will decrease retained earnings?

Stock Dividend = 149,000 x $20 x .11 = $327,800 Declare a "deficiency dividend" within 90 days of the date of IRS determination that an accumulated earnings tax is owed. The distribution of a stock dividend ________. Paid-In Capital in Excess of Par-Common 2,560,000 Additional paidin capital (excess), How would retained earnings be affected by the declaration of each of the following? (All comparisons refer to the fourth quarter of 2018, except as noted) Growth in total average loans was $1.3 billion, or 5.9%, with average commercial loan growth of $1.1 billion, or 7.8%, and . A. Balance Sheet The company's decision to shrink its balance sheet is "clearly the right call" given its deposit outflows, Autonomous Research's Smith said. Prepare the journal entries to record the declaration and the distribution of the dividends. Record (a) the journal entry at the date of declaration and (b) the journal entry at the date of issuance. $6,750,000 Explain what would Which of the following would be included in the entry to record the distribution of a 15% stock dividend? Lack of mutual agency is best described as which of the following? Average Number of Common Shares Outstanding = (294,464 + 195,168 ) / 2 = 244,816.00 Cobb received a stock dividend of 2,000 shares on March 31, year 2, when the carrying amount per share on Roe's books was $35 and the market value per share was $40. D) increases the number of shares outstanding, decreases the number of shares outstanding, Assume the following information for Petra Sales, Inc Decrease Decrease Decrease. This payment is declared by the entity when it gets approval from the board of directors and local authority. In 2015, First Inc. issued 12,000 shares of 8%, $60 par-value preferred stock with a cumulative-dividend feature. Common stock 600 (300 $2) Earnings Per Share = Net Income / Average Number of Common Shares Outstanding Earnings Per Share = $425,500 / 244,816.00 = $1.74 The allowance for credit losses increased $1.6 million, and the allowance for unfunded commitments, included in the liabilities section on the balance sheet, increased $1.9 million from . 25 Cash ($7 per share x 600 shares) 4,200 Mar. For example, RealEst is the real estate company that runs the business is the town for three years and now the accumulated earnings reach 100,000 USD. When performing an audit on entity financial statements, auditors might find some misstatements due to accounting treatments. C) liabilities decrease Dividends Payable-Common 12,500 Dividends Payable-Preferred 10,000 Dividends are a distribution of cash, stock, or other property to stockholders. The journal entry to record a small stock dividend (less than 2025%) transfers an amount equal to the fair value of the stock to be issued from retained earnings to paidin capital. Additional paidin capital 300,000 Retained earnings represent a useful link between the income statement and the balance sheet, as they are recorded under shareholders' equity, which connects the two statements. During 20X6, Long took the following actions: On May 18, 20X4, Sol Corp.'s board of directors declared a 10% stock dividend. Stock dividend $87,600 receiving large dividends within several years of the investment Which is the correct journal entry to record this transaction? total paid-in capital of $475,000. Paid in capital in xcess- par $256,000 On November 1, 2017, Roosevelt, Inc. declared a dividend of $3.00 per share. On May 1, year 1, Rhud Corp. declared and issued a 10% common stock dividend. (50,000 x $0.25 = $12,500), Madison Company earned net income of $75,000 during the year ended December 31, 2016 As a result, any items that drive net income higher or push it lower will ultimately . market price 46,207. (270,000 - 13,500) These fluctuations will be due primarily to . in a partnership, the acts of the owners bind the partnership, but in a corporation, the acts of the owners do not bind the partnership unless they are also an agent of the corporation. The stock has a par value of $3.00 per share and was issued at $16.00 per share. C) credit to Cash for $170,000 and a debit to Common Stock-No-Par Value for $170,000 D) assets and stockholders' equity are increased, assets and stockholders' equity are increased, On December 2, 2017, Ewell, Inc purchases land. B) Stock Dividends would be debited for $95,400. Cash Dividends 60,000 Candela Company has retained earnings of $500,000, common stock of $400,000, and total common stockholders' equity of $1,200,000. On July 1, year 1, Alto Corp. split its common stock 5for1 when the market value was $100 per share. What is it missing in order for Jackson Essentials to be able to pay a cash dividend? D) $672,000, $739,200 The stock dividend is a 15% dividend (3,000/20,000). Thus, a 10% stock dividend is considered to be a "small" stock dividend and should be transferred from retained earnings at the FV on the date of declaration as follows: B) stock split The market value per share immediately after issuance was $15. D) Dividend payments decrease paid-in capital. repayment of bond principal stock split stock dividend declared purchase of treasury stock. Common Stock ($7 x 14,000 ) 98,000 B) the price paid if the corporation purchases its own stock back D) Treasury Stock- Common is credited for $980. Number of Common Shares Outstanding 294,464 195,168 (1,500 x 33) Universe declared a 30% stock dividend. of shares = $4.50 x 23,000 = $103,500. B total paid-in capital of $5,400,000. B : Expert Answer. the board of directors has no control over the market value of par value common stock. No effect No effect No effect If stock is issued for assets other than cash, the transaction recorded at the market value of the stock issued or the market of the assets received, whichever is more clearly determinable? Which value of stock is most relevant for potential stockholders of a corporation? common stock of $7,800,000. B) $460,000 B) Dividends Payable-Common is debited for $9,000. A) $31,000 Common Stock, $14 Par, 129,000 shares authorized,48,000 shares issued and outstanding $672,000 Prepare the journal entries to record these transactions. A) $108 Sale of treasury stock 49,500 What is the Statement of Retained Earnings? B Compute the rate of return on common stockholders' equity for 2016. d. less than 25%. D) Stock Dividends would be credited for $51,300. 150,000 + 13,500 = 163,500. The stock dividend was distributed on July 21, year 1, when the stock's market price was $10 per share. How do they compare? B) $100 -Earned net income of $40,000. A 5for1 split in this case would increase the shares outstanding to 50,000 and decrease the par value per share to $2 ($10/5). Retained earnings are what entity left from its operating profits since the beginning of the business until the reporting date. Paid in capital in xcess- par $20,000 49,405. C) to reward investors Total Paid in Capital $913,000, Lerner, Inc had the following transactions in 2017, its first year of operations Stockholders' Equity $571,000 $494,000 D) $70,000, $690,000 Revenues increase stockholders' equity through retained earnings, and expenses decrease it because they subtract from cash flow. Corporations pay both federal and state income tax. On the ________, cash dividends become a liability of a corporation. happen to GDP if nonmarket transactions were To reflect this increase, the $$ is added to the beginning unappropriated retained earnings balance on line 3, Schedule M-2. C) The dividend per share is $7.72 to preferred stock and $2.03 per share to common stock. Dividends Payable-Common 22,500 C) Paid-In Capital in Excess of Par-Common is debited for $16,150, and Common Stock-$0.05 Par Value is credited for $16,150. increase stockholders' equity and decrease total liabilities. On July 1, 2017, the company declared and distributed a 6% stock dividend. Stock dividend $270,000 achieving capital gains on the stock purchases. All temporary accounts must be reset to zero at the end of the accounting period. When a stockholder contributes cash to a corporation in exchange for stock, ________. when preferred stock is issued, B Paid in capital in Excess of Par- Common $214,000 Increased by $300,000. ($25,000 - 0 ) / ($241,000 + $210,000 ) / 2 Which of the following statements is true? in a partnership, the company is managed by a board of directors, but in a corporation, the company is managed directly by the owners. Dividends Payable-Common 60,000 ($3 per share x 4,000 shares) 12,000 The merchandise was delivered FOB shipping point. Below is an example n how to calculate retained earnings: A company has an opening balance of 50,000 from the previous period, net income of 10,000 and pays out dividends of 2,000, its retained earnings would be 68,000. A) restricting part of retained earnings for expansion or contingencies C) last day of the fiscal year The journal entry below summarizes the net effect of the entries to record a stock dividend. 111,961 . Preferred Stock, $100 par $390,000 B) decreases assets and stockholders equity The following stock dividends were declared and distributed by Sol Corp: The following format was used by Gee, Inc. for its 20X5 statement of owners' equity: Pugh Co. reported the following in its statement of stockholders' equity on January 1, 20X4: A company whose stock is trading at $10 per share has 1,000 shares of $1 par common stock outstanding when the board of directors declares a 30% common stock dividend. The entry to record the sale of treasury stock includes a debit to Retained Earnings of $3,150. If Candela Company declares a 2-for-1 stock split on its common stock, which of the following will occur? The common stock is $0.10 par value; the preferred stock is 7% noncumulative with a $100.00 par value. Dividends of $22,000 are in arrears. C : A A company originally issued 14,000 shares of $5 par value common stock at $12 per share. high. OPERATING INCOME INCREASES 93.3% AND COMPARABLE RESTAURANT SALES INCREASE 10.9% AS MARGINS EXPAND. B) $354,000 A) 4.38% A : Was reduced to $8. Common Stock, $5 par, 206,000 shares authorized, The total paid-in capital increases with a stock split but has no change with a stock dividend. Stock Dividends (14,000 shares x .14 x $25 market price) = $49,000, On June 30, 2017, Stephans, Inc showed the following data on the equity section of their balance sheet Paid-In Capital in Excess of Par-Common The dividend payment sometimes happens during the year when an entity wants to make payment to its shareholders. Mar. The corporation resells 450 shares of its treasury stock. Explain why you are likely to get lower offers from used-car dealers if they find out that you are moving away soon. Journalize these transactions. of Shares = $270,000 / $100 = 2,700 (Operator Instructions). D) repayment of bond principal, Which of the following actions will decrease Retained Earnings? Common Stock (7,000 x 9 ) 63,000 A) the current selling price of stock C) $57,857 Since the dividend described in this question is small (< 2025% of the outstanding shares), the journal entry would be B A. (.8 x $150,000 ) Net Income $358,000 $425,500 A : total paid-in capital of $7,000,000. Jan. 10 2017 there is no relationship between par value and market price. A) $163,500 D) $1,208,840, On June 30, 2017, Texas, Inc showed the following data on the equity section of their balance sheet The board of directors needs to declare the dividend. The 2017 balance for Mason Electronics reported the following items with 2016 figures given for comparison No effect Decrease It has 200,000 shares of $2 par value common stock outstanding which is currently selling for $5 per share. common stock of $1,000,000. A) Paid-In Capital From Treasury Stock Transactions is credited for$980. The annual interest rate was 10%. When a company offers a ________, the event does not require a formal journal entry on a corporation's books. ($14 x 48,000 x .10) These factors will lead to net losses and subsequently, make the negative retained earnings. Which of the following is a true statement? Preferred stock (1,800 x $160 ) $288,000 No effect No effect A corporation originally issued $8 par value common stock for $10 per share. The declaration and issuance of a stock dividend larger than 40% of the shares previously outstanding. No effect No effect Increase Dividend allocated to preferred stockholders: $84 x .14 x 13,000 shares = $152,880 C. Pay a cash dividend within 2 and 1/2 months after the end of the tax year. (Assume the balance in Paid-In Capital from Treasury Stock Transactions on March 24 is $ 1,200.) Paid-In Capital in Excess of What is the amount of dividend that will be paid for each share of common stock? At the end of 2017, what is total stockholders' equity? Logged. A corporation reported the following equity section on its current balance sheet Which of the following is a reason for a company to announce a stock split? This action will The par value per share decreases with a stock split but has no change with a stock dividend. D) Stock Dividends is debited for $49,000. Regardless of the size of a stock dividend, RE is decreased and other SE accounts are increased. In this case, the dividend is a large stock dividend resulting in a transfer at par value. Retained Earnings 500,000 The board of directors of Pilgrim Company authorizes a $100,000 restriction of retained earnings for a future plant expansion. Total Stockholders' Equity $623,600 No dividend revenue is recognized when an investor receives a proportional stock dividend, because the investor continues to own the same proportion of the investee as before the stock dividend. Earnings Release Financial Exhibit. Treasury stock _____________. 165,000 shares issued $825,000 No journal entry is made on the dividend declaration date. How is the dividend allocated between preferred and common stockholders? Common Stock 57,000 shares x .15 x $6 = $51,300, Sanella Corporation reported the following equity section on its current balance sheet A) cash dividend declared Retained Earnings 56,600 Pink Rose, Inc. has 20,000 shares of common stock outstanding and no preferred stock. At the time that entity starts its operation, normally it is hard to make a net operating profit. d. less than 25%. B) Debit Cash Dividends $103,500, and credit Cash $103,500. Balance in Retained Earnings = $949,000 - $327,800 = $621,200, On December 1, 2017, Galahad, Inc had 200,000 shares of $1 par value common stock issued and outstanding. A) liabilities remain unchanged Decrease No effect. B : McEwing, Inc has 20,000 shares of common stock outstanding and no preferred stock. B : B) stockholders' equity decreases Stock dividends are distributed to stockholders in proportion to the number of shares that stockholders already own. (450 x 3) Operator. Ad impressions and price per ad - In the first quarter of 2023, ad impressions delivered across our Family of Apps increased by 26% year-over-year and the average price per ad decreased by 17% year-over-year. A summary report called a statement of retained earnings is also maintained, outlining the changes in RE for a specific period. A It has happened only if the entity makes a profit, and if it is operating loss, then not even dividends could not be distributed, an additional contribution from shareholders . B) Treasury Stock-Common is credited for $45. One reason that companies often choose to issue no-par value common stock rather than par value common stock is that ABC announces a stock split of 4-for-1. On July 1, 2017, the company declared and distributed a 9% stock dividend. A : Retained earnings will decrease by $1,000,000. Implications for Investors Cash dividends, the most common sort, are taxed at either the normal tax rate or at a reduced rate of 20%, 15%, or 0 . Paid-In Capital in Excess of Par-Preferred $22,000 of shares = $5.00 x 20,000 = $100,000, Pearland, Inc has 9,000 shares of preferred stock outstanding $88,000 A corporation has 18,000 shares of 13%, $50 par cumulative preferred stock outstanding and 34,000 shares of no-par common stock outstanding. B) Treasury Stock- Common is credited for $910. $0.50 At the end of 2017, what is the total amount of paid-in capital? Cash dividends cause a decrease in both assets and stockholders' equity of the corporation. What is the dividend per share for preferred stock and for common stock? Bradley Corporation received cash from issuing 17,000 shares of common stock at par on January 1, 2017. On November 1, 2017, McEwing, Inc declared a dividend of $5.00 per share. Average Price = ($270,000 + $22,000 ) / 2,700 $108, The following information is from the December 31, 2017 balance sheet of Tudor Corporation Define treasury stock and provide two reasons why a corporation would purchase treasury stock. A stock split results in an increase or decrease in the number of shares outstanding and a corresponding decrease or increase in the par value per share. ($0.50 per share x 45,000 ) variable. C. $0.90 Additional paidin capital (plug) Accordingly, RE will decrease and, since all affected accounts are elements of SE, total SE will not change. Course Hero is not sponsored or endorsed by any college or university. Did not change. in a partnership, the life of the company is perpetual, but in a corporation, the life of the company is limited to a specific number of years. when dividends are distributed It is pending on the nature of adjustments whether they are positively or negatively affect the retained earnings. (200,000 x .50 x $1). Stockholders of a corporation are not personally liable for the corporation's debt. During that year, the corporation sustained a net loss of $40,000. D) credit to Cash for $170,000, a debit to Paid-In Capital in Excess of Par-Common for $10,000, and a debit to Common Stock-No-Par Value for $160,000, debit to Cash for $170,000 and a credit to Common Stock-No-Par Value for $170,000. What will be an ideal response, Stock Dividend 100,000 On November 1, 2017, Oster, Inc. declared a dividend of $4.50 per share. After the split, the par value of the stock (112,000 - 63,000 ) 49,000, When 1,000 shares of $3 stated value common stock is issued at $18 per share, _____________. Grey's stockholders' equity accounts immediately before issuance of the stock dividend shares were as follows: The stock has a par value of $0.05 per share. 40,000 x 10 = 400,000. They are both agents. As a result of this stock dividend, what is the balance of Retained Earnings? Cash 1,350 A. Appropriation do not reduce total retained earnings B. (8,500 x 8) By what amount will Universe decrease stockholders' equity for the dividend? Which of the following is included in the journal entry to record this transaction? . Pays cash dividend declared in a: Decreases assets, decreases equity Payment of dividend reduces cash balance so assets decreases. Preferred stockholders receive a dividend preference over common stockholders. An investor is looking to invest in companies that do not pay regular dividends now but instead reinvest their retained earnings back into the company. A : $7,500,000. Total amount paid to preferred shareholders: ($50 x .13 x 18,000 shares current year) + $22,000 in arrears = $139,000 48,333. A) will decrease Paid-In Capital in Excess of Par-Preferred 25,000 The year-end balance sheet would show Hitachi, Ltd. (OTCPK:HTHIY) Q4 2023 Results Conference Call April 27, 2023 3:00 AM ETCompany ParticipantsKeiji Kojima - CEOYoshihiko Kawamura - CFOTomomi Kato - VP, Deputy CFOOperatorNow. C) limiting company transactions in order to boost earnings 3 Treasury Stock-Common Stockholders' equity $20,000 Paid-in capital in excess of par 1,180,000 Retained earnings 3,200,000 Total stockholder's equity $4,400,000 Assume that Archer carries out a 2-for . In 2015, the firm paid total dividends of $30,000, and in 2016, it paid total dividends of $45,000. common stock of $125,000. Stockholders are not authorized to sign contracts or make business commitments on behalf of the corporation. Peterson, Inc. issued 4,000 shares of preferred stock for $240,000. From the perspective of upper management, what are the pros and cons of empowering workers to take care of problems? C) credit to Cash Dividends for $4,625 2. President, Inc. has 10,000 shares of common stock outstanding and 20,000 of preferred. A) internally generated equity that is received from employee stock purchases The executive officers need to declare the dividend. Dividend per common share: $208,000 - $139,000 = $69,000.00 / 34,000 shares = $2.03. ($12,000 + $22,500 ) Additional paidin capital Retained earnings Find the winners by each of the five methods using the following schedule: Consider a three-way race between candidates called A, B, and C. Make a preference schedule for the following results: 22 voters rank the candidates in the order (first choice to last choice) A, B, C. 20 voters rank the candidates in the order C, B, A. A) debit Common Stock-$6 Par Value for $36,000 and debit Paid-In Capital in Excess of Par-Common $394,000 Paid-In Capital in Excess of Par-Common This helps illustrate the direct connection between a company's income statement and balance sheet.Stockholders' equity is equal to the sum of total assets plus total liabilities, so an increase in a company's assets and contributed capital causes an increase in . First quarter revenues of $2.33 billion, down 10.7% from 2022; First quarter reported diluted earnings per share ("EPS") of $1.78, down 39.0% from 2022; and adjusted diluted EPS of $2.04, down 36.6% from 2022; First quarter base business revenues of $2.21 billion, up 10.0% from 2022; Full year 2023 revenues now expected to be between $8.93 billion and $9.08 billion; reported diluted EPS now . Stockholders merely receive more shares of stock. C C) increases the number of shares issued The two entries would include a $200,000 debit to retained earnings and a $200,000 credit to the common stock account. decrease total assets and total stockholders' equity. Therefore, Retained earnings would be charged for $45,000 (3,000 $15). June 7 -Issued 4,000 shares of $3 par value common stock for cash of $12 per share D) Debit Cash Dividends $100,000, and credit Cash $100,000. (The answer is "No"), Retained Earnings: Definition, Formula, Example, and Calculation. A) Cash is debited for $850, and Common Stock-$0.05 Par Value is credited for $850. Stock Dividends and Splits. C. Pay a cash dividend within 2 and 1/2 months after the end of the tax year. Bonus Issue: A bonus issue, also known as a scrip issue or a capitalization issue, is an offer of free additional shares to existing shareholders. The stock has a par value of $3.00 per share and was issued at $19.00 per share. The land should be recorded at. Common stock $10 par; 20,000 shares authorized outstanding $200,000 D) increases both dividends payable and cash, effects only stockholder's equity accounts, When the corporation declares a stock dividend, a stockholder's percentage ownership in the stock of the corporation ________. Our verified expert tutors typically answer within 15-30 minutes. C) Paid-In Capital From Treasury Stock Transactions is debited for $70. On May 18, year 1, Sol Corp's board of directors declared a 10% stock dividend. Madison then paid the dividends on January 10, 2017. A) $32,143 A) $1,376,000 Par-Common ($75,000 - $15,000 ) 60,000. The adjustments to the misstatements that propose by auditors have sometimes affected the entitys financial statements opening balance including retained earnings. Oster, Inc. has 23,000 shares of common stock outstanding and no preferred stock. No effect No effect, Decrease No effect In this chapter, you have learned that the amount of revenue from sales less the cost of goods sold is called gross profit. Corporations pay both federal and state income tax. Common Stock, $1 par; 202,000 shares authorized, 150,000 shares issued and outstanding $150,000 $672,000 + 67,200 = $739,200, On June 30, 2017, Roger, Inc showed the following data on the equity section of their balance sheet Mar. C) $739,200 -Issued 31,000 shares of common stock. B How to prepare a statement of retained earnings? Total dividend payment $4,625, When a previously declared dividend is paid, which of the following occurs? Paid-In Capital in Excess of Par-Common 206,000 C : Treasury Stock-Common C Justin is a stockholder, while Julia is an agent. How would the declaration of a 10% stock dividend by a corporation affect each of the following on its books? D : Show your computations.) First quarter revenues of $2.33 billion, down 10.7% from 2022. Investors and other interested individuals can compare the ratios of companies operating in the same industry. B)to provide the shareholders with something of value, when the company cannot afford a cash dividend The stock has a par value of $60 per share. $1,150,000 $ 350,000. $320,000 Stated value stock is no-par stock that has been assigned an amount similar to par value. At what point are preferred dividends considered a liability? 115,941. B A)the difference between the issue price and the stated value is credited to Paid-In Capital in Excess of Stated

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