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Exam 21: Corporate Earnings and Capital Transactions

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Question 31

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The entry to adjust for over-estimated income taxes paid would include a credit to Income Tax Expense.

A) True
B) False

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Question 32

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A stock dividend transfers:

A) Retained earnings to contributed capital.
B) Contributed capital to retained earnings.
C) Contributed capital to assets.
D) Assets to contributed capital.

E) C) and D)
F) All of the above

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Question 33

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On August 10,2016 a corporation received a donation of land for a future plant site.The land has a fair market value of $800,000.Record the entry to reflect the receipt of this asset as a gift on page 3 of a general journal.Omit the description.

Which of the following would not change the amount of total retained earnings for the year?

A liability for the payment of cash dividends is recorded

If a corporation receives a gift of land valued at $10,000 from a city,the accountant will record a debit to Land and a credit to ___________________.

On the date of declaration of a stock split,a(n)____________________ notation is recorded in the general journal.

The income statement of a corporation and a sole proprietorship are similar with the exception of

Retained Earnings represents the cash earned throughout the years less amounts paid out as dividends.

The entry to record the appropriation of funds to reacquire its own stock includes a

Corporations are required to make quarterly estimated tax payments based on estimated tax expense.

A stock ____________________ increases the number of shares of stock outstanding and decreases the par value,or stated value,per share proportionally.

A corporation has paid estimated income taxes of $80,000 during the year 2016.At the end of the year,the corporation's tax bill is computed to be $100,000.Record the entry to adjust the Income Tax Expense account on page 6 of a general journal.Omit the description.

Both cash dividends and stock dividends decrease the total stockholders' equity.

On the worksheet for the current year ended Dec 31,column totals in the Income Statement section are debit,$220,000 and credit $285,000.Assuming income and deductions for tax purposes are the same as those for financial reporting and the company has paid estimated taxes of $15,000 to date.Tax rates remain 15% for the first $50,000;25% on the next 25,000;34% on the next $25,000 and 39% on the excess over $100,000.Prepare the adjusting entry for income taxes.

A corporation has paid estimated income taxes of $9,000 during the year 2016.At the end of the year,the corporation's tax bill is computed to be $10,000.Record the entry to adjust the Income Tax Expense account on page 6 of a general journal.Omit the description.

The effect of issuing a stock dividend is to convert a portion of the corporation's ____________________ to permanent capital.

As long as actual tax expense does not materially differ from estimated tax expense,a corporation may record the difference in the subsequent year and not violate the matching principle in so doing.

A corporation has paid estimated income taxes of $52,100 during the year 2016.At the end of the year,the corporation's tax bill is computed to be $50,000.Record the entry to adjust the Income Tax Expense account on page 6 of a general journal.Omit the description.

Butler Corporation declared and issued a 10% stock dividend on December 1.Prior to the declaration,Butler's retained earnings were $800,000,shares outstanding were 50,000,$5 par value,common stock with a current market value of $10 per share.Total stockholders' equity will increase (decrease) as a result of recording this stock dividend by: