For each of the following events affecting the stockholders’ equity of Noland, indicate whether the event would: increase retained earnings

Match each of the following accounts to its proper balance sheet classification.

Retained earnings Long-term investments Current assets Current liabilities Property, plant, and equipment Common stock Intangible assets Long-term liabilities		Accounts payable
Intangible assets Retained earnings Current assets Current liabilities Long-term liabilities Property, plant, and equipment Long-term investments Common stock		Accounts receivable
Property, plant, and equipment Current liabilities Retained earnings Common stock Intangible assets Current assets Long-term investments Long-term liabilities		Accumulated depreciation
Common stock Current liabilities Long-term investments Current assets Intangible assets Long-term liabilities Property, plant, and equipment Retained earnings		Buildings
Long-term investments Long-term liabilities Property, plant, and equipment Retained earnings Intangible assets Current assets Current liabilities Common stock		Cash
Intangible assets Current assets Retained earnings Current liabilities Long-term investments Long-term liabilities Property, plant, and equipment Common stock		Goodwill
Long-term liabilities Current assets Common stock Property, plant, and equipment Retained earnings Current liabilities Intangible assets Long-term investments		Income taxes payable
Long-term liabilities Intangible assets Retained earnings Property, plant, and equipment Current assets Current liabilities Common stock Long-term investments		Investment in long-term bonds
Long-term investments Intangible assets Retained earnings Long-term liabilities Common stock Current assets Current liabilities Property, plant, and equipment		Land
Current liabilities Long-term investments Long-term liabilities Current assets Property, plant, and equipment Common stock Intangible assets Retained earnings		Inventory
Common stock Retained earnings Current assets Long-term liabilities Property, plant, and equipment Intangible assets Current liabilities Long-term investments		Patent
Long-term liabilities Property, plant, and equipment Intangible assets Current assets Current liabilities Common stock Retained earnings Long-term investments		Supplies

For each of the following events affecting the stockholders’ equity of Noland, indicate whether the event would: increase retained earnings, decrease retained earnings, increase common stock, or decrease common stock.

(a)		Decrease Common Stock Decrease Retained Earnings Increase Retained Earnings Increase Common Stock		Issued new shares of common stock
(b)		Decrease Retained Earnings Increase Retained Earnings Increase Common Stock Decrease Common Stock		Paid a cash dividend
(c)		Decrease Retained Earnings Increase Common Stock Decrease Common Stock Increase Retained Earnings		Reported net income of $75,000
(d)		Increase Common Stock Decrease Retained Earnings Increase Retained Earnings Decrease Common Stock		Reported net loss of $20,000

The board of directors of Benson Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2014. The dividend is to be paid on August 15, 2014

The board of directors of Benson Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2014. The dividend is to be paid on August 15, 2014, to stockholders of record on July 31, 2014. The correct entry to be recorded on August 15, 2014, will include a

debit to Dividends Payable.

debit to Cash Dividends.

credit to Cash Dividends.

credit to Dividends Payable.

The Common Stock Distributable account is classified as a current liability.

True

False

The current cash debt coverage ratio is computed by dividing net cash provided by operations by average total liabilities.

True

False

Which of the following transactions does not affect cash during a period?

Sale of treasury stock.

Collection of an accounts receivable.

Redeeming bonds before maturity.

Write-off of an uncollectible account.

The effect of the declaration of a cash dividend by the board of directors is to

Current maturities of long-term debt refers to the amount of interest on a note payable that must be paid in the current year.

True

False

A current liability must be paid out of current earnings.

True

False

Which one of the following events would not require a journal entry on a corporation's books?

2% stock dividend.

$1 per share cash dividend.

2-for-1 stock split.

100% stock dividend.

A 3-for-1 common stock split will increase total stockholders' equity but reduce the par or stated value per share of common stock.

True

False

The effect of the declaration of a cash dividend by the board of directors is to

Increase

Decrease

Liabilities Assets

Liabilities Stockholders' equity

Stockholders' equity Assets

Assets Liabilities

Dividends in arrears are not a liability until the board of directors declares the dividends, nor are they an expense. They are disclosed in a footnote.

Dividends in arrears are not a liability until the board of directors declares the dividends, nor are they an expense. They are disclosed in a footnote.

How are dividends in arrears reported in the financial statements?

In a footnote

As an equity item

As a liability

	As an expense
	This statement is false. A cumulative dividend feature means that preferred stockholders must be paid current-year dividends and any unpaid prior-year dividends before common stockholders receive dividends.

A cumulative dividend feature means that preferred stockholders must be paid only current-year dividends before common stockholders receive dividends.

True

	False
The capital stock section of the balance sheet consists of preferred and common stock. Any stock accounts that are in excess of the par or stated value are included in the additional paid-in capital section.

Which one of the following is not part of ‘capital stock’ in the balance sheet?

Paid-in capital in excess of par value-common stock

Convertible Class A preferred stock, stated value

Non-voting Class B preferred stock, stated value

Common stock, stated value