44) On the cash dividends become a liability of a corporation. A) date of record
ID: 2597197 • Letter: 4
Question
44) On the cash dividends become a liability of a corporation. A) date of record 44) declaration date B) payment date D) last day of the fiscal year 45) When a previously declared dividend is paid, which of the following occurs A) assets remain unchanged 45) B) liabilities decrease D) assets increase equity increases 46) Saturn Corporation has 19,000 shares of 10% S76 par noncumulative preferred stock outstanding and 24,000 shares of no-par common stock outstanding, At the end of the current year, the 46) corporation declares a dividend of $184,000. How is the dividend allocated between preferred and common stockholders? stockholders. stockholders. stockholders. stockholders. A) The dividend is allocated $182,400 to preferred stockholders and $1,600 to common B)The dividend is allocated $144,400 to preferred stockholders and $39,600 to common C) The dividend is allocated $6.230 to preferred stockholders and $102.698 to commom D) The dividend is allocated $81,302 to preferred stockholders and $102,698 to common 47) On November 1, 2017, President, Inc. declared a dividend of S3.00 per share. President, Inc. has 10,000 shares of common stock outstanding and 20,000 of preferred stock. The date of record is November 15, and the payment date is November 30, 2017. Regarding the date of record, which of the following statements is true? A) The company transfers cash to a brokerage firm on the date of record. B) The liability must be recorded on the date of record. C) Cash is disbursed to shareholders on the date of record. D) No journal entry is made on the date of record. 48) When the corporation declares a stock dividend, a stockholder's percentage ownership in the stock of the corporation will increase C) can increase or decrease B) will decrease D) remains unchanged common stock outstanding at the beginning of the year and 18,000 shares of common stock outstanding at the end of the year. There were 11,000 shares of preferred stock outstanding all year During 2016, New Corporation declared and paid preferred dividends of $16,000. What is New Corporation's earnings per share? (Round the answer to two decimal places) 49) New Corporation had net income for 2016 of $79,000. New Corporation had 13,000 shares of D) $4.06 $4.39 C) $3.50 A) $5.10Explanation / Answer
Answer to Question no. 44
Option C i.e. Declaration date.
Declaration Date is the date on which dividend is declared by the Board of Directors of the Corporation. Once declared, a dividend becomes the Liability of the Corporation.
Whereas, Date of Record is the date on which Corporation recognises the Shareholders who are entitles to receive the Dividend. The Shareholder must be in the register of shareholder on the date of record. And, payment Date is the date on which dividend is paid.
Answer to Question no. 45
Option B i.e. Liability Decrease.
A dividend once declared, becomes the liability of the corporation. And, on the payment of declared dividend, the liability decrease. The payment of dividend will also decrease assets due to cash outflow. The Dividend declaration decrease Stockholders’ Equity, but dividend payment doesn’t effect it.
Answer to Question no. 46
Option B i.e. The Dividend is allocated $144,400 to Preferred Stockholders and $39,600 to Common Stockholders.
Total Dividend Declared = $184,000
Firstly, Dividend will be paid to Preferred Stockholders.
Preferred Stockholders Dividend = 19,000 * $76 * 10%
Preferred Stockholders Dividend = $144,400
The remaining balance will be paid to Common Stockholders.
Common stockholders Dividend = $184,000 - $144,400 = $39,600
Answer to Question no. 47
Option D i.e. No Journal Entry is made on the date of record.
The Date of Record is the date on which Corporation recognises the Shareholders who are entitles to receive the Dividend. No entry is passed on the date of record.
The Company transfers cash to brokerage firm after the declaration of dividend. Even, the liability is recognised on the date of declaration and payment date is the date on which Dividend is paid. Like, November 30,2017 is the Payment date and November 15 is the record date.
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