13.The date on which a cash dividend becomes a binding legal obligation is on the a.declaration date.b.date of record.c.payment date.d.last day of the fiscal year-end.Ans: a, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Communications, AICPA BB:Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Communication, IMA: Reporting 14.If a corporation declares a 10% ordinary share dividend, the account to be debited onthe date of declaration is 15.Share dividends and share splits have the following effects on retained earnings:Share SplitsShare Dividends 4
16.On the dividend record date, 17.Manner, Inc. has 5,000 shares of 5%, ₤100 par value, noncumulative preferenceshares and 20,000 ordinary shares with a ₤1 par value outstanding at December 31,2017. There were no dividends declared in 2016. The board of directors declares andpays a ₤55,000 dividend in 2017. What is the amount of dividends received by theordinary shareholders in 2017? a. ₤0b. ₤25,000c. ₤55,000d. ₤30,000Ans: d, LO: 5, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB:Industry/Sector, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA 18.On January 1, Castagno Corporation had 1,600,000 ordinary shares with a $10 parvalue outstanding. On March 31, the company declared a 15% share dividend. Marketvalue was $15/share. As a result of this event, 5
Ans: d, LO: 5, Bloom: C, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting
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