which of the following actions will decrease retained earnings?

It is pending on the nature of adjustments whether they are positively or negatively affect the retained earnings. B : Number of Common Shares Outstanding 294,464 195,168 Was reduced to $2. 40,000 x 10 = 400,000. The common stock is currently selling for $15.00 per share. Retained earnings (10,000 $30) 300,000 The total amount due to the stockholders for the scrip dividend is $4,500,000 + $2,250,000 interest = $6,750,000. On July 1, 2017, the company declared and distributed a 11% stock dividend. C) that is distributed by corporations to avoid liquidation B : 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 . The market value of the stock on December 2, 2017 was $9 per share. Balance Sheet Was reduced to $5. Paid in capital in xcess- par $20,000 A. Which of the following statements is true? decrease total assets and total stockholders' equity. An elite private college receives large donations from successful alumni. 25 Sold 600 shares of the treasury stock for cash of $ 7 per share. D) increases assets and stockholders' equity. B) passed dividends on noncumulative preferred stock $0 net realizable value The amount paid to stockholders should be $4,500,000 plus the interest earned during each of the five years. If the money is used to pay full scholarships, and the price of tuition is$61,000 per year to attend, how many more students can receive full four-year scholarships if the interest was compounded daily rather than using simple interest? At maturity, each shareholder of Godart's three million shares will receive payment of the note principal plus interest. Course Hero is not sponsored or endorsed by any college or university. During that year, the corporation sustained a net loss of $80,000. Form 1120 Schedule M-2: Increases and Decreases. D) $106, $108 Stockholders' Equity The stock split was. B) The company transfers cash to the brokerage firm on the date of record. Following this transaction, what is total stockholders' equity? A) $1.22 Prepare the journal entry to record this transaction. E. Create and document a business plan to invest retained earnings in a plant expansion. Log in Join. 17 Cash ($12 per share x 400 shares) 4,800 Taft Industries had 250,000 shares of common stock outstanding before a stock split occurred and 500,000 shares outstanding after the stock split. Paidin capital in excess of par (Plug) Therefore, the declaration of a stock dividend will decrease retained earnings. D) Paid-In Capital in Excess of Par-Common is debited for $196,000. B) have first claim on remaining corporate assets after debts are paid D) purchase of treasury stock. Increased by $300,000. Hadley Corporation issued 200,000 shares of $5 par value common stock for $25 per share. A few years later, the entity might generate more sales and make its first breakeven. At this time, entity retained earnings will positively increase. A To find the return on common stockholders' equity, divide net income available to common stockholders by ________ stockholders' equity. Paid-In Capital in Excess of Par-Common 2,560,000 C. $0.90 Preferred stock (2,000 x $200 ) $400,000 of shares 18,500 False Did not change. C) limiting company transactions in order to boost earnings What would be the balance in the Common Stock account after the issuance of a 10% stock dividend? 2022 2021 Increase/(Decrease) Peso Value % Assets 21,376,672.4 2 20,448,640.0 6 20,448,640.06 . 17 Sold 400 shares of the treasury stock for cash of $ 12 per share. 240,000 shares issued, 230,000 shares outstanding $240,000 Cash Dividends 34,500 Explain why you are likely to get lower offers from used-car dealers if they find out that you are moving away soon. C : A when dividends are distributed Our verified expert tutors typically answer within 15-30 minutes. In what way is a corporation different from a sole proprietorship or partnership? No entry was made on the stock dividend declaration date. Open a New Bank . What is total stockholders' equity after this transaction? List the net income vertical analysis ratio for each fiscal year presented. A) common stock On July 1, 2017, the company declared and distributed a 9% stock dividend. common stock of $5,000,000. Peterson, Inc. issued 4,000 shares of preferred stock for $240,000. ending common No assets are transferred to stockholders as in the case of a cash or property dividend. Bonus shares. Which of the following is true of dividends? This is how the dividend makes retained earnings decrease. total paid-in capital of $5,400,000. $25,000 / $225,500 = 11.09%. Preferred Stock-$60 Par Value 240,000. (50,000 x $0.25 = $12,500), Madison Company earned net income of $75,000 during the year ended December 31, 2016 The assets, total stockholders' equity, and the additional paidin capital accounts of the company are not affected. $2,100 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. What happens if no-par value stock does not have a stated value? of shares = $4.50 x 23,000 = $103,500. average common We recommended that Management take the following actions: a. B) Stock Dividends would be debited for $95,400. This answer is correct because the stock dividend involves transferring an equal amount from retained earnings to invested capital. The adjustments to the misstatements that propose by auditors have sometimes affected the entitys financial statements opening balance including retained earnings. D) The dividend is allocated $235,200 to preferred stockholders and $55,200 to common stockholders. This answer is correct. List the assumptions that underlie cost-volume-profit analysis. 150,000 + 13,500 = 163,500. C) Debit Cash $100,000, and credit Dividends Payable-Common $100,000. This answer is correct. Q: For each action on the right, indicate the effect on Retained earnings (inc4ease, decrease, or no A: Retained earnings means earnings accumulated for the shareholders of the company. Greetings, and welcome to First Republic Bank's First Quarter 2023 Earnings Conference Call. They are both stockholders. Cash dividend. (Net income - Preferred dividends) / Average common stockholders' equity $0 For Year Ended December 31, 2019 A. The common stock is currently selling for $18.25 per share. Retained Earnings $222,00 C Using simple interest, the interest can be calculated as $4,500,000 10% = $450,000 each year 5 years = $2,250,000 interest. No effect Decrease Candela Company has retained earnings of $500,000, common stock of $400,000, and total common stockholders' equity of $1,200,000. Memorandum entry is an entry in the journal that notes a significant event but has no debit or credit amount. A) are guaranteed to receive the par value of the preferred stock The land should be recorded at. The board of directors of Pilgrim Company authorizes a $100,000 restriction of retained earnings for a future plant expansion. B) $2.18 D) must be recorded in the period in which the error occurred, are shown on the statement of retained earnings as corrections to the beginning balance, The statement of stockholders' equity ________. What is one major difference between a stock split and a stock dividend? Stock has par value of $1.00 per share and was issued at $20.00 per share. 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. $15,000. 8. Label the point that shows the position of the economy in case. C) are guaranteed that they will not have a loss on their investment Corporations usually account for stock dividends by transferring a sum from retained earnings . D : The fair value of Rhud's common stock was $30 per share on May 1, year 1. No effect No effect Increase B) The dividend per share is $11.56 to preferred stock and $0 per share to common stock. When performing an audit on entity financial statements, auditors might find some misstatements due to accounting treatments. Retained Earnings represents: O A. the amount invested in the entity by the stockholders. Retained Earnings 56,600 D) that gives its owners certain advantages over common stockholders, that gives its owners certain advantages over common stockholders, Preferred stock holders ______________. B) Common Stock-$5 Par Value is credited for $47,040. Paid-In Capital from Treasury Stock Transaction 1,200 the impact on the cash flow statement was a reduction in cash flows on acquisition of businesses and a corresponding decrease in cash flows from operations. Additional paidin capital 300,000 Paid in capital in Excess of Par- Common $214,000 . The only proper way to eliminate an appropriation of retained earnings after it has served its purpose is to revert to the unappropriated retained earnings C. When treasury shares are purchased, retained earnings must be appropriated equal. A corporation declares a dividend of .50 per share on 18,000 shares of common stock. $6,750,000 APIC 2,100 (excess) Thus, Sol should credit $2,100 to additional paidin capital. D) $8,100, $113,400 D) generally have voting rights, receive a dividend preference over common stockholders, In the event of a corporate liquidation preferred stockholders _______________. The stock has a par value of $3.00 per share and was issued at $16.00 per share. Grey's stockholders' equity accounts immediately before issuance of the stock dividend shares were as follows: When declaring stock dividends, companies issue additional shares of the same class of stock as that held by the stockholders. Mar. C) credit to Cash for $170,000 and a debit to Common Stock-No-Par Value for $170,000 A) total stockholders' equity will decrease B The year-end balance sheet would show B) $32,000 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 . Treasury Stock-Common 100% (4 ratings) Stock Dividend declared will decrease the . Total stockholders' equity $677,000, Castle, Inc had the following transactions in 2017, its first year of operations D) determines who owns the shares of stock on that date, determines who owns the shares of stock on that date, Happy Farmer, Inc has 44,000 shares of common stock outstanding and 3,000 shares of preferred stock outstanding A) $56,000 D Word. Common Stock 57,000 shares x .15 x $6 = $51,300, Sanella Corporation reported the following equity section on its current balance sheet Which of the following actions CANNOT be used to reduce or eliminate a potential accumulated earnings tax liability involving a C corporation owned 100% by a married couple? Compute the balances in the shareholders equity accounts immediately after the issuance (any gains or losses are to be reflected in the retained earnings balance; ignore income . D) assets and stockholders' equity are increased, assets and stockholders' equity are increased, On December 2, 2017, Ewell, Inc purchases land. A) Cash is debited for $850, and Common Stock-$0.05 Par Value is credited for $850. D : -Earned net income of $40,000. B) that is distributed to employees as annual bonuses d. less than 25%. D) The dividend per share is $11.56 to preferred stock and $2.03 per share to common stock. Company A. Today's conference is being recorded. Corporations pay both federal and state income tax. Which of the following will decrease the balance in Retained earnings A from ACCOUNTING 202 at Rutgers University, Newark. A) repayment of bond principal Total amount paid to preferred shareholders: ($50 x .13 x 18,000 shares current year) + $22,000 in arrears = $139,000 Which of the following statements is true of a corporation? C : The total par value of the stock increases with a stock split but has no change with a stock dividend. This is depending on management decisions. Treasury Stock- Common is debited for $400,000 Cash is debited for $850, and Common Stock-$0.05 Par Value is credited for $850. Dividends Payable-Common 22,500 While recording business transactions, remember that the foundation of the accounting process is the following basic accounting equation: (2.4.1) Assets = Liabilities + Stockholders'Equity. 3 Purchased 1,800 shares of the company's $ 3 par value common stock as treasury stock, paying cash of $ 10 per share. Common stock (31,000 x $20 ) $620,000 On November 1, 2017, Pink Rose, Inc. declared a dividend of $3.00 per share. b. C) $380,000 B Retained Earnings Statement. Which of the following is included in the entry to record the sale of 70 shares of treasury stock for $14 per share? This is because not many sales are made during the first few years, but the entity normally incurs the large amounts of operating expenses including deprecation, staff, branding, marketing expenses, and other administrative costs. A summary report called a statement of retained earnings is also maintained, outlining the changes in RE for a specific period. Treasury stock, 15,000 shares at $40 -600,000 No journal entry is made on the dividend declaration date. $0.50 C Cash Dividends 60,000 Does a Dividend Reduce Profit? Declare a "deficiency dividend" within 90 days of the date of IRS determination that an accumulated earnings tax is owed. D) par goes to $64.00; total shares increase to 244,000, par drops to $4.00; total shares increase to 244,000, Which of the following actions will decrease the amount of Total Stockholders' Equity? Total Liabilities 330,000 284,000 The income summary is used to transfer the balances of temporary accounts to retained earnings, which is a permanent account on the balance sheet. A) restricting part of retained earnings for expansion or contingencies Which of the following is included un the entry of the declaration? Effective April 27, year 2, the stockholders of Bennett Corporation approved a twoforone split of the company's common stock, and an increase in authorized common shares from 100,000 shares (par value $20 per share) to 200,000 shares (par value $10 per share). D) $672,000, $739,200 When a stock dividend is declared by the board of directors, the following journal entry is made: A : LO 14.1 The number of shares that a corporation's incorporation documents allows it to sell is referred to as ________. Universe Co. issued 500,000 shares of common stock in the current year. C) Stockholders may authorize a business contract on behalf of the corporation. Stockholders may receive dividends from corporate earnings. reduce the amount of retained earnings available for dividend declarations. revenues; paid-in capital. Common stock dividend distributable $67,200 (Round answers to the nearest dollar.) Total Stockholders' A few examples of dividends include: 1. D) Stock Dividends would be credited for $51,300. A At the end of the current year, the corporation declares a dividend of $208,000. Cash 34,500. C) Cash Dividends is credited for $9,000. Problem 8 - Retained Earnings As of January 1, 1998 the retained earnings account had a credit balance of $100,500. B At what point are preferred dividends considered a liability? when a dividend is declared by the board of directors Corporations pay both federal and state income tax. $7,500,000. The company needs to pay taxes on their retained earnings. B) $996,900 Retained Earnings 957,000 ending total Cash 240,000 The board of directors needs to declare the dividend. c. less than or equal to 10%. The company's decision to shrink its balance sheet is "clearly the right call" given its deposit outflows, Autonomous Research's Smith said. D) the amount assigned by a company to a share of its stock, the amount assigned by a company to a share of its stock, The retained earnings of a corporation is ______________. This answer is correct. A) decreases both assets and liabilities 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: At that time, the dividend is the debit to retained earnings and credit to payable to shareholders. B) Cash is credited for $17,000 and Common Stock-$0.05 Par Value is debited for $17,000. This payment is declared by the entity when it gets approval from the board of directors and local authority. common stock of $125,000. $ 150,000 $ 350,000 The entry to record the sale of treasury stock includes a debit to Retained Earnings of $3,150. B) Stockholders are guaranteed annual dividends. corporations own stock that it has required Implement the provisions stated under COA Circular 2022-004 relative to the . B) Treasury Stock- Common is credited for $910. 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. -Paid-In Capital in Excess of Par-Common: $1,770,000 Retained Earnings = 60,000 + 10,000 - 2,000 = 68,000. B) $690,000 C) no-par stock A : Stockholders merely receive more shares of stock. common stock of $500,000. What will be an ideal response, Cash Dividend 22,500 Justin is a stockholder, while Julia is an agent. These amounts use for two main purposes: reinvestment or distribution to shareholders. Increase No effect B) Paid-In Capital in Excess of Stated -Common for $63,000 Explain what would A) issues new shares of stock on that date Total Stockholders' Equity $4,380,000 $5,132,000 No. 115,941. D (Explained), Ultimate Guide To Getting GCS Pay Stubs And W2s For A Current And Former Employee, Ultimate Guide To Getting Grubhub Pay Stubs, 1099-K And W2s For A Current And Former Employee, Ultimate Guide To Getting GAP Pay Stubs And W2s For A Current And Former Employee, Ultimate Guide To Getting Giant Pay Stubs And W2s For A Current And Former Employee. Paid-In Capital in Excess of Par"Common $262,000 The Corporation recorded a net decrease to retained earnings of $2.4 million net of tax as of January 1, 2023 for the cumulative effect of adopting Topic 326. C -Common Stock, $1.00 par, 232,000 shares issued, 186,000 shares outstanding The executive officers need to declare the dividend. Which of the following is included in the journal entry to record this transaction? 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 . D) debit Cash $430,000, credit Common Stock-6 Par Value for $36,000 and credit Paid-In Capital in Excess of Par-Common $394,000, The following information is from the December 31, 2017 balance sheet of Jackson Corporation B) par value stock (Operator Instructions). The two entries would include a $200,000 debit to retained earnings and a $200,000 credit to the common stock account. D) Debit Cash Dividends $100,000, and credit Cash $100,000. The dividend is allocated $152,880 to preferred stockholders and $27,120 to common stockholders. Stockholders' Equity The account that holds these donations has $955,000,000 currently. Retained earnings are affected by any increases or decreases in net income and dividends paid to shareholders. B. The common stock is $0.10 par value; the preferred stock is 7% noncumulative with a $100.00 par value. Treasury stock is recorded at cost, without reference to par value. Prepare the journal entry for the transaction. The total par value of shares outstanding remains unchanged, as do the balances of additional paidin capital and retained earnings. happen to GDP if nonmarket transactions were 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. 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 . Observation 2: A dividend decrease is typically a positive signal by a company's management to its shareholders. The market value was $50 per share, the par value was $10, and the average issue price was $30 per share. Common stock Additional paidin capital A) internally generated equity that is received from employee stock purchases 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. -Retained Earnings: $2,450,000 What is the dividend per share for preferred stock and for common stock? How will Supermart, Inc report treasury stock on its balance sheet as of December 31, 2016? Stockholders' equity Equity (all common) 241,000 210,000 B) Common Stock is debited for $98,000. D : Decrease No effect. C) effects only stockholder's equity accounts C. cumulative net income that has not been distributed to stockholders as dividends. When a company offers a ________, the event does not require a formal journal entry on a corporation's books. Decrease No effect 46,207. C) $57,857 C) $1,302,860 A) $820,000 D) Paid-In Capital in Excess of Stated-Common for $49,000, Paid-In Capital in Excess of Stated-Common for $49,000 D Common Stock 100,000 On May 18, year 1, Sol Corp's board of directors declared a 10% stock dividend. C) $6,979,500 . B) Debit Dividends Payable-Common $100,000, and credit Cash $100,000. Paidin capital 290,000, On September 30, year 1, Grey Company issued 3,000 shares of its $10 par common stock in connection with a stock dividend. Total equity after the sale of stock $7,039,500. Mar. Common Stock, $1 par; 195,000 shares authorized, 149,000 shares issued and outstanding $149,000 Mar. 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. D : What was the total paid-in capital as of December 31, 2017? Explanations are not required. B : B) setting cash aside for expansion $88,000 48,333. C : EARNINGS WEBCAST INFORMATION. This stock dividend was distributed 60 days after the declaration date. Paid in Capital in Excess of Par 150,000 These shares were acquired for $10 per share and sold for $3 per share. D) to increase total stockholders' equity, to decrease the market price at which the stock is trading, ABC has 61,000 shares of $16.00 par common stock outstanding. reduce the amount of retained earnings available for dividend declarations. Preferred stock (1,800 x $160 ) $288,000 The stock dividend is a 15% dividend (3,000/20,000). Most corporations set par value low and issue common stock at a premium. 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 ________. . Retained earnings are what entity left from its operating profits since the beginning of the business until the reporting date. Total equity does not change. VALIX EDITION chapter statement of changes in equity problem reliable company provided the following information for the year ended december 31, 2019: retained Skip to document Ask an Expert Required: For each of the preceding alternative items: 1. A company originally issued 14,000 shares of $5 par value common stock at $12 per share. 33 min read. C) liabilities decrease The total amount of dividends paid out to preferred stockholders, On the date of record for a dividend, the company ________. Cash dividends cause a decrease in both assets and stockholders' equity of the corporation. Dividends Payable = Dividends per share x No. 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. The retained earnings account is not reduced either. Dividends Payable-Preferred 12,000 of shares = $5.00 x 20,000 = $100,000, Pearland, Inc has 9,000 shares of preferred stock outstanding On November 1, 2017, McEwing, Inc declared a dividend of $5.00 per share. A) Stock Dividends is debited for $24,500. Dividend per preferred share = $139,000 / 18,000 shares = $7.72 The credit to the Common Stock account is $144,000. The Purpose of Retained Earnings. $ 150,000 $ 1,350,000 Was reduced to $8. C) Common Stock is credited for $294,000. Entity normally requires to have an audit of their financial statements annually by an independent auditor. Stock Dividends and Splits. Stock dividends have no effect on total stockholders' equity. D) Cash is debited for $17,000, Common Stock-$0.05 Par Value is credited for $850, and Paid-In Capital in Excess of Par-Common credited for $16,150. -Paid no dividends. obtaining a voting right with the purchase of common stock B) internally generated equity that is earned by profitable operations that is not distributed to stockholders Dividends Payable-Preferred 10,000 Oster, Inc. has 23,000 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. Dividend allocated to common stockholders: $180,000 - $152,880 = $27,120. C 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 A) $736,000 Ross Corporation reported the following: The only effects of a stock split are on the number of shares outstanding and on the par value of the stock. Total par value is not affected by a stock split (10,000 $10 before split; 50,000 $2 after split). Problem 9 - Classify accruals and deferrals $350,000. variable. The distribution of a stock dividend ________. President, Inc. has 10,000 shares of common stock outstanding and 20,000 of preferred. C) credit to Cash Dividends for $4,625 A) The dividend is allocated $8,107 to preferred stockholders and $109,091 to common stockholders. No journal entries are recorded for a stock split. A. Appropriation do not reduce total retained earnings B. paid-in capital; earned capital. B) credit Common Stock-6 Par Value for $36,000 and credit Paid-In Capital in Excess of Par-Common $394,000 Cash 1,350 The market value per share immediately after issuance was $15. Aug. 16 -Issued 400 shares of no-par preferred stock for $25,000 cash As a result, any items that drive net income higher or push it lower will ultimately . Julia is a stockholder, while Justin is an agent. no-par value common stock does not have to be recorded in the corporate charter. D During Year 2, the company experienced the following events: Purchased inventory that cost $12,000 on account from Ross Company under terms 2/10, n/30. there is no relationship between par value and market price. Total stockholders equity $1,261,000 the board of directors has no control over the market value of par value common stock. Paid-In Capital in Excess of Par-Common No journal entry is made on the date of record. PORTLAND, Ore., April 28, 2023 /PRNewswire/ -- Portland General Electric Company (NYSE: POR) today reported net income based on generally accepted accounting principles (GAAP) of $74 million, or $0.80 per diluted share, for the first quarter of 2023.

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