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The following accounts appear in the ledger of Bradley, Inc., after the books are closed at December 31, 2014. The following accounts appear in the ledger of Bradley, Inc., after the books are closed at December 31, 2014. Instructions Prepare the stockholders' equity section at December 31, 2014, assuming that part of retained earnings is restricted for plant expansion in the amount of $200,000. Instructions Prepare the stockholders' equity section at December 31, 2014, assuming that part of retained earnings is restricted for plant expansion in the amount of $200,000.

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blured image Note: Retained earn...

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Identify (by letter) each of the following characteristics as being an advantage or a disadvantage of the corporate form of business or not applicable to the corporate form of business organization. Identify (by letter) each of the following characteristics as being an advantage or a disadvantage of the corporate form of business or not applicable to the corporate form of business organization.

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1. A 5. D
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The following are selected accounts and balances from the records of Doran Corporation on June 30, 2014. The following are selected accounts and balances from the records of Doran Corporation on June 30, 2014. Instructions Prepare in proper form the stockholders' equity section of the balance sheet. Instructions Prepare in proper form the stockholders' equity section of the balance sheet.

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The board of directors of Yancey Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2014. The dividend is to be paid on August 15, 2014, to stockholders of record on July 31, 2014. The correct entry to be recorded on July 15, 2014, will include a


A) debit to Dividends Payable.
B) debit to Cash Dividends.
C) credit to Cash.
D) credit to Cash Dividends.

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

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Looper, Inc. has 30,000 shares of 6%, ₤100 par value, noncumulative preference shares and 50,000 ordinary shares with a ₤1 par value outstanding at December 31, 2014. There were no dividends declared in 2013. The board of directors declares and pays a ₤250,000 dividend in 2014. What is the amount of dividends received by the common shareholders in 2014?


A) ₤0
B) ₤180,000
C) ₤250,000
D) ₤70,000

E) None of the above
F) All of the above

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Regular dividends are declared out of


A) paid-in capital in excess of par value.
B) treasury stock.
C) common stock.
D) retained earnings.

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

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Patrick Corporation is authorized to issue 1,000,000 shares of $1 par value common stock. During 2014, the company has the following stock transactions. Jan. 15 Issued 700,000 shares of stock at $7 per share. Sept. 5 Purchased 20,000 shares of common stock for the treasury at $8 per share. Dec. 6 Declared a $0.50 per share dividend to stockholders of record on December 20, payable January 3, 2015. Instructions Journalize the transactions for Patrick Corporation.

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If Lantz Company issues 5,000 shares of $5 par value common stock for $210,000, the account


A) Common Stock will be credited for $25,000.
B) Paid-in Capital in Excess of Par Value will be credited for $25,000.
C) Paid-in Capital in Excess of Par Value will be credited for $210,000.
D) Cash will be debited for $185,000.

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

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Placing a restriction on retained earnings will


A) assure that a company has sufficient cash for a specific purpose.
B) increase total stockholders' equity.
C) communicate to readers a portion of retained earnings is unavailable for dividends.
D) decrease total stockholders' equity.

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

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Jahnke Corporation issued 8,000 shares of €2 par value ordinary shares for €11 per share. The journal entry to record the sale will include


A) a debit to Cash for €16,000.
B) a credit to Share Premium-Ordinary for €72,000.
C) a credit to Share Capital-Ordinary for €88,000.
D) a debit to Retained Earnings for €72,000.

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

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Retained earnings are occasionally restricted


A) to set aside cash for dividends.
B) to keep the legal capital associated with paid-in capital intact.
C) due to contractual loan restrictions.
D) if preferred dividends are in arrears.

E) None of the above
F) B) and C)

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Giraldi Corporation's stockholders' equity section at December 31, 2013, appears below: Giraldi Corporation's stockholders' equity section at December 31, 2013, appears below: On June 30, 2014, the board of directors of Giraldi Corporation declared a 15% stock dividend, payable on July 31, 2014, to stockholders of record on July 15, 2014. The fair value of Giraldi Corporation's stock on June 30, 2014, was $16. On December 1, 2013, the board of directors declared a 2 for 1 stock split effective December 15, 2014. Giraldi Corporation's stock was selling for $18 on December 1, 2014, before the stock split was declared. Par value of the stock was adjusted. Net income for 2014 was $230,000 and there were no cash dividends declared. Instructions (a) Prepare the journal entries on the appropriate dates to record the stock dividend and the stock split. (b) Fill in the amount that would appear in the stockholders' equity section for Giraldi Corporation at December 31, 2014, for the following items: On June 30, 2014, the board of directors of Giraldi Corporation declared a 15% stock dividend, payable on July 31, 2014, to stockholders of record on July 15, 2014. The fair value of Giraldi Corporation's stock on June 30, 2014, was $16. On December 1, 2013, the board of directors declared a 2 for 1 stock split effective December 15, 2014. Giraldi Corporation's stock was selling for $18 on December 1, 2014, before the stock split was declared. Par value of the stock was adjusted. Net income for 2014 was $230,000 and there were no cash dividends declared. Instructions (a) Prepare the journal entries on the appropriate dates to record the stock dividend and the stock split. (b) Fill in the amount that would appear in the stockholders' equity section for Giraldi Corporation at December 31, 2014, for the following items: Giraldi Corporation's stockholders' equity section at December 31, 2013, appears below: On June 30, 2014, the board of directors of Giraldi Corporation declared a 15% stock dividend, payable on July 31, 2014, to stockholders of record on July 15, 2014. The fair value of Giraldi Corporation's stock on June 30, 2014, was $16. On December 1, 2013, the board of directors declared a 2 for 1 stock split effective December 15, 2014. Giraldi Corporation's stock was selling for $18 on December 1, 2014, before the stock split was declared. Par value of the stock was adjusted. Net income for 2014 was $230,000 and there were no cash dividends declared. Instructions (a) Prepare the journal entries on the appropriate dates to record the stock dividend and the stock split. (b) Fill in the amount that would appear in the stockholders' equity section for Giraldi Corporation at December 31, 2014, for the following items:

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On January 1, McCarver Corporation had 600,000 shares of $10 par value common stock outstanding. On March 31 the company declared a 10% stock dividend. Market value of the stock was $15/share. As a result of this event,


A) McCarver's Paid-in Capital in Excess of Par Value account increased $300,000.
B) McCarver's total stockholders' equity was unaffected.
C) McCarver's Stock Dividends account increased $900,000.
D) All of these answer choices are correct.

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

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On January 1, Ripken Corporation had 40,000 shares of $10 par value common stock outstanding. On March 17 the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The entry to record the transaction of March 17 would include a


A) debit to Stock Dividends for $52,000.
B) credit to Cash for $52,000.
C) credit to Common Stock Dividends Distributable for $52,000.
D) credit to Common Stock Dividends Distributable for $12,000.

E) None of the above
F) A) and B)

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The _______________ is the chief executive officer with direct responsibility for managing the business.

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What is the total stockholders' equity based on the following account balances?  Common Stock $1,800,000 Paid-In Capital in Excess of Par 120,000 Retained Earnings 570,000 Treasury Stock 60,000\begin{array}{lr}\text { Common Stock } & \$ 1,800,000 \\\text { Paid-In Capital in Excess of Par } & 120,000 \\\text { Retained Earnings } & 570,000 \\\text { Treasury Stock } & 60,000\end{array}


A) $2,190,000.
B) $2,430,000.
C) $2,550,000.
D) $1,680,000.

E) A) and C)
F) None of the above

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On January 1, 2014, Browning Corporation had 75,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred: On January 1, 2014, Browning Corporation had 75,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred: Instructions Prepare journal entries to record the above transactions. Instructions Prepare journal entries to record the above transactions.

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The following selected amounts are available for Thomas Company.  Retained earnings (beginning)  $2,500 Net loss 200 Cash dividends declared 200 Stock dividends declared 200\begin{array}{lr}\text { Retained earnings (beginning) } & \$ 2,500 \\\text { Net loss } & 200 \\\text { Cash dividends declared } & 200 \\\text { Stock dividends declared } & 200\end{array} What is its ending Retained Earnings balance?


A) $2,200.
B) $2,300.
C) $1,900.
D) $2,100.

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

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The declaration and distribution of a stock dividend will


A) increase total stockholders' equity.
B) increase total assets.
C) decrease total assets.
D) have no effect on total assets.

E) None of the above
F) A) and D)

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The number of shares of issued stock equals


A) unissued shares minus authorized shares.
B) outstanding shares plus treasury shares.
C) authorized shares minus treasury shares.
D) outstanding shares plus authorized shares.

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

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