which of the following actions will decrease retained earnings?
obtaining a voting right with the purchase of common stock 3 Treasury Stock-Common No effect No effect, Decrease No effect President, Inc. has 10,000 shares of common stock outstanding and 20,000 of preferred. This is the best choice based on the information available. Stockholders merely receive more shares of stock. Stockholders receive their proportionate share of any assets remaining after the corporation pays its debts and liquidates. The FV of the stock on the date of declaration is not indicated in the problem; however, the FV immediately after issuance of the stock dividend is $15. Retained Earnings Statement. C) The dividend is allocated $70,909 to preferred stockholders and $109,091 to common stockholders. Paid-In Capital in Excess of Par-Common Remained at $10. Julia is a stockholder, while Justin is an agent. Cash (7,000 x 16 ) 112,000 During 20X6, Long took the following actions: On May 18, 20X4, Sol Corp.'s board of directors declared a 10% stock dividend. Treasury Stock-Common Declare a "deficiency dividend" within 90 days of the date of IRS determination that an accumulated earnings tax is owed. (Round your answer to the nearest cent.) Following this transaction, what is the balance of Common Stock? Dividends Payable-Common 12,500 If treasury shares are sold for less than their cost, the difference is recorded as a loss. Cash (14,000 x $21 ) 294,000 Common Stock, $5 par, 206,000 shares authorized, -Paid-In Capital in Excess of Par-Common: $1,770,000 B) Cash is credited for $17,000 and Common Stock-$0.05 Par Value is debited for $17,000. Prepare the journal entry to record this transaction. Common stock dividend distributable $67,200 A) Cash is debited for $850, and Common Stock-$0.05 Par Value is credited for $850. Misclassiflcations Rox Corporations multiple-step income statement and retained earnings statement for the year ended December 31, 2019, as developed by its bookkeeper, are shown here: You determine that the account balances listed on the statements are correct but are incorrectly classified in certain cases. All temporary accounts must be reset to zero at the end of the accounting period. Revenues increase stockholders' equity through retained earnings, and expenses decrease it because they subtract from cash flow. Total Stockholder's Equity $1,376,000 Which of the following is included in the journal entry to record this transaction? of shares 18,500 Retained earnings (RE) Total stockholders' equity (SE) The corporation resells 450 shares of its treasury stock. (1,500 x 33) What is the effect of the split? The market price of Sol's 3,000 outstanding shares of $2 par value common stock was $9 per share on that date. C. cumulative net income that has not been distributed to stockholders as dividends. -Paid no dividends. Mar. C Retained earnings 350,000 Common Stock-$3 Par Value D) Common Stock- $5 Par Value is credited for $200,000. How is the dividend allocated between preferred and common stockholders? Treasury Stock-Common B) $32,000 reduce the amount of retained earnings available for dividend declarations. D) passed dividends on common stock, passed dividends on cumulative preferred stock. A) debit to Cash for $170,000 and a credit to Common Stock-No-Par Value for $170,000 Which is the correct journal entry to record this transaction? Was reduced to $2. From the perspective of upper management, what are the pros and cons of empowering workers to take care of problems? The total par value of shares outstanding remains unchanged, as do the balances of additional paidin capital and retained earnings. Hadley Corporation issued 200,000 shares of $5 par value common stock for $25 per share. Transcribed image text: Which of the following actions will decrease the balance in Retained Earnings? Then, shortly following the end of the first quarter, . We set new operational records in the first quarter. The credit to the Common Stock account is $144,000. If a company retires preferred stock, ________. The cost of merchandise is a significant cost for all merchandising businesses. C) liabilities decrease APIC 2,100 (excess) Thus, Sol should credit $2,100 to additional paidin capital. reduce the amount of retained earnings available for dividend declarations. NEWPORT BEACH, Calif., April 25, 2023 /PRNewswire/ Chipotle Mexican Grill, Inc. today reported financial results for its first quarter ended March 31, 2023. Mar. -Earned net income of $37,000. The board of directors declares an 14% stock dividend when the market price of the stock is $25 a share. These shares were acquired for $10 per share and sold for $3 per share. Paid-In Capital in Excess of Par-Common 206,000 D : LO 14.1 The number of shares that a corporation's incorporation documents allows it to sell is referred to as ________. 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. C) $286,000 A) issues new shares of stock on that date The entry to record the sale of treasury stock includes a debit to Retained Earnings of $3,150. The amount paid to stockholders should be $4,500,000 plus the interest earned during each of the five years. Most corporations set par value low and issue common stock at a premium. No journal entry is made on the dividend declaration date. It has 200,000 shares of $2 par value common stock outstanding which is currently selling for $5 per share. A) one asset is increased and another asset is decreased One reason that companies often choose to issue no-par value common stock rather than par value common stock is that Regarding the date of record, which of the following statements is true? D) increases the number of shares outstanding, decreases the number of shares outstanding, Assume the following information for Petra Sales, Inc B)to provide the shareholders with something of value, when the company cannot afford a cash dividend Did not change. The merchandise was delivered FOB shipping point. B $ 150,000 $ 1,350,000 Get additonal benefits from the subscription, Explore recently answered questions from the same subject, Explore documents and answered questions from similar courses. (112,000 - 63,000 ) 49,000, When 1,000 shares of $3 stated value common stock is issued at $18 per share, _____________. The issuance of a stock dividend of 2025% or less requires that the market value of the stock be transferred from retained earnings. Assets Total stockholders' equity Additional paidin capital Retained Earnings 500,000 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 $2,400 Regarding the company's performance and returns to shareholders, Haviv Ilan, TI's . Company A. C) Dividend payments increase stockholders' equity. b. less than 40%. B) is required to be presented along with the statement of retained earnings market price Madison then paid the dividends on January 10, 2017. increase stockholders' equity and decrease total liabilities. in a partnership, the company is managed by a board of directors, but in a corporation, the company is managed directly by the owners. D) $1,208,840, On June 30, 2017, Texas, Inc showed the following data on the equity section of their balance sheet Common Stock, $1 Par, 1,180,000 shares authorized in a partnership, the transfer of ownership interest requires the consent of only the transferring partner, but in a corporation, the transfer of ownership interest requires the consent of all the owners. B) debit to Cash $4,625 The stock dividend was distributed on July 21, year 1, when the stock's market price was $10 per share. of shares = $4.50 x 23,000 = $103,500. C) is not required by IFRS At the beginning of Year 2, the Redd Company had the following balances in its accounts. A) decreases both assets and liabilities A) the current selling price of stock No assets are transferred to stockholders as in the case of a cash or property dividend. A) are guaranteed to receive the par value of the preferred stock 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 . Treasury stock, 15,000 shares at $40 -600,000 Justin is a stockholder, while Julia is an agent. Retained Earnings 946,000 -Issued 2,000 shares of $200 par value preferred stock at par. 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? Several analysts increased the price target of Mastercard Inc MA following reporting a strong Q1 earnings beat. a. increases common stock outstanding and increases total stockholders' equity. Was reduced to $5. 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 . (144,000 - 48,000 ) 196,000, Jenkins Realty, Inc. issued 7,000 shares of $9 stated value common stock for $16 per share. All net income The next day Galahad declared and distributed a 50% stock dividend. 150,000 + 13,500 = 163,500. The market value per share immediately after issuance was $15. par value common stock is too expensive for most investors. On July 1, 2017, the company declared and distributed a 11% stock dividend. The land should be recorded at. Cobb Co. purchased 10,000 shares (2% ownership) of Roe Co. on February 12, year 2. Dividend per preferred share = $139,000 / 18,000 shares = $7.72 McEwing, Inc has 20,000 shares of common stock outstanding and no preferred stock. Explain what would Was reduced to $2. The land was advertised for sale at $10,500. Actual inflation is 333 percent, and expected inflation is 555 percent. How would the declaration and subsequent issuance of a 10% stock dividend by the issuer affect each of the following when the market value of the shares exceeds the par value of the stock? C) Paid-In Capital From Treasury Stock Transactions is credited for 25,000. C) Cash Dividends is credited for $9,000. On November 1, 2017, McEwing, Inc declared a dividend of $5.00 per share. If First declares $180,000 in total dividends for 2017, what amount will be available for its common stockholders? B) have first claim on remaining corporate assets after debts are paid Total Stockholder's Equity $1,358,000 C) $3,520 B The executive officers need to declare the dividend. Additional paidin capital (plug) Accordingly, RE will decrease and, since all affected accounts are elements of SE, total SE will not change. 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. A deficit occurs when a company has reoccurring losses and/or dividends in excess of retained earnings. D) $621,200, $621,200 When a corporation retires its shares of treasury stock, the stock certificates are canceled. Retained earnings 1,150 Which of the following is included in the entry to record the sale of 70 shares of treasury stock for $14 per share? C) The liability must be recorded on the date of record. $1,150,000 $ 350,000. A) decreases assets and increases stockholders equity Legal capital refers to the portion of stockholders' equity that cannot be used for dividends. This action will The statement of retained earnings reports how the company's retained earnings balance changed from the beginning of the period to the end of the period. Common Stock, $1 par 152,000 (270,000 - 13,500) 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 . Paid in capital in xcess- par $20,000 The total retained earnings has no change with a stock split but increases with a stock dividend. (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) declaration date C A : A corporation issues 16,000 shares of its $3 stated value common shares. If Candela Company declares a 2-for-1 stock split on its common stock, which of the following will occur? A : ($10 per share x 600 shares) 6,000 Jan. 10 2017 Earnings Per Share = Net Income / Average Number of Common Shares Outstanding Earnings Per Share = $425,500 / 244,816.00 = $1.74 First quarter reported diluted earnings per share ("EPS") of $1.78, down 39.0% from 2022; and adjusted . $2,100 Paid-In Capital in Excess of Par-Preferred $22,000 A : A. D Sept. 19 Land 75,000