Review questions 3. For what reason do corporations retain earnings i

Review questions 3. For what reason do corporations retain earnings in the business? 5. What are the three dates involved in the declaration and payment of dividends? What is the meaning of each date? 6. What is the effect of a cash dividend on the corporation accounts? 7. Give three reasons why a corporation may distribute a stock dividend. 8. Where should stock dividends distributable be reported on the balance sheet? Why? 10. What is the primary reason for appropriating retained earnings? 11. How are appropriated and unappropriated retained earnings shown on the statement of retained earnings? E21-6A: RETAINED EARNINGS APPROPRIATION On October 2 20-1 the board of directors of Foxworth Company appropriated $80 000 of retained earnings for the purpose of buying a new sailboat (used for entertaining clients). On July 15 20-2 the sailboat was purchased and the board of directors decided that the appropriation was no longer needed. Prepare journal entries for the appropriation on October 2 20-1 and the subsequent return on July 15 20-2. 21-9A:CASH DIVIDENDS STOCK DIVIDEND AND STOCK SPLIT During the year ended December 31 20– Choi Company completed the following transactions: Apr. 15 Declared a semiannual dividend of $1.50 per share on preferred stock and $0.40 per share on common stock to shareholders of record on May 5 payable on May 10. Currently 6 000 shares of $50 par preferred stock and 80 000 shares of $1 par common stock are outstanding. May 10 Paid the cash dividends. Oct. 15 Declared semiannual dividend of $1.50 per share on preferred stock and $0.40 per share on common stock to shareholders of record on November 5 payable on November 20. Nov. 20 Paid the cash dividends. 22 Declared a 10% stock dividend to common shareholders of record on December 8 distributable on December 16. Market value of the common stock was estimated at $7 per share. Dec. 16 Issued certificates for common stock dividend. 20 Board of directors declared a two-for-one common stock split.

3 Simple steps to get your paper done

Step 1

Step 2

Step 3

Place Order Down to work Paper is Ready!

Takes just a few minutes!

Best writer takes the order

Access via your account