Final Exam Review Problems

Declare a cash dividend

No effect, No effect, Decrease

Paid the cash dividend declared above

No effect, No effect, No effect

Declare a stock dividend

Increase, Increase, Decrease

Issues the shares for the stock dividends above

No effect, No effect, No effect

Issue common stock for cash at par value

Increase, No effect, No effect

2 for 1 stock split

No effect, No effect, No effect

Issued preferred stock at par value for cash

Increase, No effect, No effect

Issued common stock for more than par value

Increase, Increase, No effect

Journal Entry: Issued 7200 shares of common stock for $540,000

Cash (debit)

Common Stock (credit)

Paid-in Excess for Common Stock (credit)

Journal Entry: Declare a cash dividend $2 per share to stockholders of record on June 15

Cash Dividends (debit)

Dividend Payable (credit)

Paid the cash dividend

Dividend Payable (debit)

Cash (credit)

Purchased 4,000 shares of common stock for $18/ share

Treasury Stock (debit)

Cash (credit)

We declare a cash dividend on outstanding share of $2.50 per share to stockholder on record as Dec. 31

Cast Dividend (debit)

Dividends Payable (credit)