On June 1, 20x5, Jomax Corporation had 60,000 shares of $10 par value common stock outstanding. On June 2, 20x5, Jomax declared a 40 percent stock dividend to be distributed on July 5, 20x5, to shareholders of record on June 15, 20x5. What amount of retained earnings should be transferred to contributed capital because of this dividend?
A) None
B) Par value per share multiplied by the number of dividend shares
C) Market value of the stock at the date of distribution multiplied by the number of dividend shares
D) Market value of the stock at the date of declaration multiplied by the number of dividend shares
B
You might also like to view...
A company can acquire ISO 9001 certification by ______.
A. sending its employees for training in lean concepts B. declaring its commitment to high-quality production C. demonstrating to a third-party auditor a company’s systems and operations fulfill certain standard criteria D. ensuring all its suppliers are quality Black Belts
Which of the following will not result in dissolution of a partnership?
A) Withdrawal of a partner. B) Negative capital balance of a partner. C) Death of a partner. D) Admission of a new partner.
Firms must designate each derivative as a hedging instrument, or else accounting views the derivative as a nonhedging instrument. Furthermore, firms must designate each hedging instrument as either a fair value hedge or a cash flow hedge. The accounting for nonhedging derivatives
a. remeasures both the hedged item and the derivative to fair value each period and recognize any unrealized gains and losses in net income. b. remeasures the derivative to fair value each period and include the unrealized gain or loss in other comprehensive income to the extent that the derivative instrument is effective in neutralizing risk. When the firm settles the hedged item, transfer the previously unrealized gain or loss from other comprehensive income to net income. c. remeasures the derivative to fair value each period and include the unrealized gain or loss in net income. d. all of the above e. none of the above
When using modified accrual accounting, revenues should be recognized when measurable and available to finance expenditures of the current period.
Answer the following statement true (T) or false (F)