1. Which of the following statements about property dividends is not true? a. A

Question

1. Which of the following statements about property dividends is not true?

a. A property dividend is usually in the form of securities of other companies.

b. A property dividend is also called a dividend in kind.

c. The accounting for a property dividend should be based on the carrying value (book value) of the nonmonetary assets transferred.

d. All of the above

2. On July 1, 2009, Noble, Inc. issued 9% bonds in the face amount of $5,000,000, which mature on July 1, 2015. The bonds were issued for $4,695,000 to yield 10%, resulting in a bond discount of $305,000. Noble uses the effective-interest method of amortizing bond discount. Interest is payable annually on June 30. At June 30, 2011, Noble's unamortized bond discount should be
      a. $264,050.
      b. $255,000.
      c. $244,000.
      d. $215,000.

3. (TCO E) Stockholders' equity is generally classified into two major categories:
   a. contributed capital and appropriated capital.
   b. appropriated capital and retained earnings.
   c. retained earnings and unappropriated capital.
   d. earned capital and contributed capital.

Explanation / Answer

1. The correct option is c.

2. The correct option is a. $ 264,050

3. The correct option is c

Date Amortization of discount Discount on bonds payable Bond carrying value 305,000 4, 695,000 June 30 2010 19,500 285,500 4,714,500 June 30 2011 21,450 264,050 4,735,950

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