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The Matt Tress Sofa Company has 11,000 shares of $2 par common stock outstanding. On August 22, 2019, a 3% stock dividend was declared to be distributed on September 30, 2019. The market value of the stock on August 22 was $21; the market value on September 30 was $18. What is the amount to be debited to the Retained Earnings account on August 22?


A) $6,270.
B) $990.
C) $5,940.
D) $6,930.

E) C) and D)
F) A) and C)

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On August 10, 2019, a corporation received a donation of land for a future plant site. The land has a fair market value of $800,000. Record the entry to reflect the receipt of this asset as a gift on page 3 of a general journal. Omit the description.

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Match the description with the accounting terms.

Premises
A financial statement that provides an analysis reconciling the beginning and ending balance of each of the stockholders' equity accounts.
Capital resulting from the receipt of gifts by a corporation
Capital acquired from capital stock transactions
Distribution of the corporation's own stock on a pro rata basis that results in conversion of a portion of the firm's retained earnings to permanent capital
A formal declaration of an intention to restrict dividends
Equity account used to record par, or stated, value of shares to be issued as the result of the declaration of a stock dividend
The cumulative profits and losses of the corporation not distributed as dividends
When a corporation issues two or more shares of new stock to replace each share outstandin without making any changes in the capital accounts
Transactions that are highly unusual, clearly unrelated to routine operations, and that do not frequently occur
The date that dividends are paid
Stockholders in whose name shares are held on date of record and who will receive a declared dividend
The total equity applicable to a class of stock divided by the number of shares outstanding
The date on which the board of directors declares a dividend
The date on which the specific stockholders to receive a dividend are determined
A financial statement that shows all changes that have occurred in retained earnings during the period
A corporation's own capital stock that has been issued and reacquired; the stock must have been previously paid in full and issued to a stockholder
The amount of taxes that will be payable in the future as a result of the difference between taxable income and income for financial statement purposes in the current year and in past years
Responses
Appropriation of retained earnings
Book value (stock)
Common Stock Dividend Distributable account
Declaration date
Deferred income taxes
Donated capital
Extraordinary, nonrecurring items
Paid-in capital
Payment date
Record date
Retained earnings
Statement of retained earnings
Statement of stockholders' equity
Stock dividend
Stock split
Stockholders of record
Treasury stock

Correct Answer

A financial statement that provides an analysis reconciling the beginning and ending balance of each of the stockholders' equity accounts.
Capital resulting from the receipt of gifts by a corporation
Capital acquired from capital stock transactions
Distribution of the corporation's own stock on a pro rata basis that results in conversion of a portion of the firm's retained earnings to permanent capital
A formal declaration of an intention to restrict dividends
Equity account used to record par, or stated, value of shares to be issued as the result of the declaration of a stock dividend
The cumulative profits and losses of the corporation not distributed as dividends
When a corporation issues two or more shares of new stock to replace each share outstandin without making any changes in the capital accounts
Transactions that are highly unusual, clearly unrelated to routine operations, and that do not frequently occur
The date that dividends are paid
Stockholders in whose name shares are held on date of record and who will receive a declared dividend
The total equity applicable to a class of stock divided by the number of shares outstanding
The date on which the board of directors declares a dividend
The date on which the specific stockholders to receive a dividend are determined
A financial statement that shows all changes that have occurred in retained earnings during the period
A corporation's own capital stock that has been issued and reacquired; the stock must have been previously paid in full and issued to a stockholder
The amount of taxes that will be payable in the future as a result of the difference between taxable income and income for financial statement purposes in the current year and in past years

Corporations are subject to the same tax filing deadlines as individual taxpayers.

A) True
B) False

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The Deferred Income Tax account represents postponement of taxes payable to a future period.

A) True
B) False

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The record date is the date:


A) used to determine who will receive the dividend.
B) on which the board of directors declares the dividend.
C) on which the dividend is paid.
D) on which the dividend transaction is recorded in the general journal.

E) B) and C)
F) A) and D)

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On the date of declaration of a stock split, a(n)----------is recorded in the general journal.

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In each of the following situations, what is the amount of the profit or loss? In each situation, what accounts will be debited and credited, and for what amount, in the journal entry to close the Income Summary account? 1. The total of the debit column in the Income Statement section of the worksheet was $94,000 and the total of the credit column in that section was $104,000. 2. The total in the debit column of the Income Statement section was $200,000 and the total of the credit column was $100,000. 3. The total of the debit column in the Balance Sheet section was $53,000 and the total of the credit column in that section was $55,000.

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1. There was a profit of $10,000. Debit ...

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Which of the following statements regarding the income statements of corporations is not correct?


A) Some corporations include cost of goods sold with the operating expenses.
B) Some corporations show income tax expense as an operating expense rather than as a deduction from net income before income tax.
C) If a gain or loss results from a transaction that is highly unusual, is clearly unrelated to routine operations, and is not expected to occur again in the near future, the gain or loss is shown as an operating expense.
D) Corporations can use a variety of formats for the income statement.

E) B) and D)
F) B) and C)

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Declarations of cash dividends and stock dividends are debited to the Retained Earnings account.

A) True
B) False

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A corporation's own capital stock that has been reacquired is called--------- .

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In each of the following situations, what is the amount of the profit or loss? In each situation, what accounts will be debited and credited, and for what amount, in the journal entry to close the Income Summary account? 1. The total of the debit column in the Income Statement section of the worksheet was $84,000 and the total of the credit column in that section was $74,000. 2. The total in the debit column of the Income Statement section was $600,000 and the total of the credit column was $700,000. 3. The total of the debit column in the Balance Sheet section was $90,000 and the total of the credit column in that section was $82,000.

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1. There was a loss of $10,000. Credit I...

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The income statement of a corporation and a sole proprietorship are similar with the exception of:


A) retained earnings.
B) revenues reported.
C) income taxes.
D) total expenses of the corporation.

E) A) and C)
F) C) and D)

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Information from the Income Statement columns of Lincoln Corporation's worksheet on December 31, 2019, is shown below. Information from the Income Statement columns of Lincoln Corporation's worksheet on December 31, 2019, is shown below. 1. What is the amount of net income before income tax? 2. What is the amount of income tax on the net income? Use the tax rates set forth below. 3. The corporation paid $21,000 through quarterly deposits. What adjustment is recorded for Incom Tax Expense? 4. What is the amount of net income after income tax? 1. What is the amount of net income before income tax? 2. What is the amount of income tax on the net income? Use the tax rates set forth below. 3. The corporation paid $21,000 through quarterly deposits. What adjustment is recorded for Incom Tax Expense? 4. What is the amount of net income after income tax? Information from the Income Statement columns of Lincoln Corporation's worksheet on December 31, 2019, is shown below. 1. What is the amount of net income before income tax? 2. What is the amount of income tax on the net income? Use the tax rates set forth below. 3. The corporation paid $21,000 through quarterly deposits. What adjustment is recorded for Incom Tax Expense? 4. What is the amount of net income after income tax?

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1. $109,400; 2. $25,916; 3. Debit Income...

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A stock dividend transfers:


A) Retained earnings to contributed capital.
B) Contributed capital to retained earnings.
C) Contributed capital to assets.
D) Assets to contributed capital.

E) B) and C)
F) A) and B)

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The amount of capital acquired from capital stock transactions is referred to as-------- .

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Which of the following statements is not correct?


A) Corporations must estimate and prepay their income taxes through quarterly tax deposits.
B) At the end of the year, when the worksheet is prepared, the Income Tax Expense account is adjusted only if the corporation owes additional taxes.
C) Income Tax Expense may be shown as an operating expense on a corporation's income statement.
D) On a corporate income statement, the tax effect of each extraordinary item is offset against each gain or loss to show the effect 'net of taxes'.

E) B) and C)
F) A) and C)

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Gender Corporation declared and issued a 10% stock dividend on December 1. Prior to the declaration, Gender's retained earnings were $200,000, shares outstanding were 20,000, $5 par value, common stock with a current market value of $10 per share. Contributed capital will increase (decrease) as a result of recording this stock dividend by:


A) $0.
B) $10,000.
C) $(10,000) .
D) $20,000.

E) A) and D)
F) A) and C)

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Corporations are required to make quarterly estimated tax payments based on estimated net income and tax expense.

A) True
B) False

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The entry to record the appropriation of funds to reacquire its own stock includes a:


A) debit to Treasury Stock-Common.
B) credit to Treasury Stock-Common.
C) debit to Retained Earnings.
D) debit to Retained Earnings Appropriated for Treasury Stock Purchase.

E) B) and D)
F) C) and D)

Correct Answer

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