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Exam 21: Corporate Earnings and Capital Transactions

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Question 1

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After all revenue and expense accounts,other than Income Tax Expense,have been extended to the Income Statement section of the worksheet of Tyler Corporation,the net income is determined to be $50,000.Using the following corporate income tax rates,compute the corporation's federal income taxes payable.(Assume that the firm's taxable income is the same as its income for financial accounting purposes. )

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Question 2

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The cost of treasury stock is deducted from the sum of all items in the ____________________ section of the balance sheet.

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Stockholde...

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When a corporation reacquires stock that it previously issued and intends to reissue at a later date,the ____________________ account is debited.

Aspen Corporation reported net income of $120,000 for its fiscal year and declared and paid cash dividends of $60,000 during the year.In November the 10,000 shares of $10 par,common stock split,2 for 1.If the ending balance of the Retained Earnings prior to the split was $200,000,the beginning balance was

Deferred income taxes arise because the taxable income of a corporation can differ from the net income reported on its financial statements.

Which of the following statements is not correct?

The effect of an event or transaction that is infrequent in occurrence and highly unusual in nature is shown as a(n)____________________ item on the income statement.

Samuel Corporation declared and distributed a 10 percent stock dividend on its $5 par common stock in November.10,000 shares of common were authorized,8,000 were issued and outstanding at the declaration.The market value on the date of declaration was $12 per share.The amount credited to Paid-in-Capital in Excess of Par Value-Common Stock is:

A corporation reported a net income of $90,000 for its fiscal year and declared and paid cash dividends of $60,000.A stock dividend recorded at $30,000 was also distributed during the year.If the beginning balance of the Retained Earnings account was $140,000,the ending balance is

On April 15,the board of directors declared a 2 for 1 split on Samco's 20,000 outstanding shares of $10 par,common stock.After the split,the total number of shares and par value per share are:

A corporation reported a net income of $200,000 for its fiscal year and declared and paid cash dividends of $80,000.A stock dividend recorded at $40,000 was also distributed during the year.If the beginning balance of the Retained Earnings account was $60,000,calculate the ending balance in the Retained Earnings account.

The total of the owners' claims to the assets of a corporation is represented by the

Contributed capital represents the cumulative profits and losses of the corporation less dividends declared and distributed.

The entry to record the income tax payable would include debit to Retained Earnings and a credit to Income Tax Payable.

Accumulated profits kept in the business and not distributed as dividends to stockholders are called ___________________.

Declarations of cash dividends and stock dividends are debited to the Retained Earnings account.

A corporation may use ___________ to lower market share prices in an effort to attract new investors.

The entry to record the declaration of a cash dividend consists of a debit to

A formal method by which a company can restrict dividend distributions.

The last closing entry for a corporation transfers the net income after income taxes from the Income Summary account to Retained Earnings.