Questions
Questions
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Question 1.1 Xeris, Inc. has 1,000 shares of 5%, $10 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2012. What is the annual dividend on the preferred stock? $5 per share
$500 in total
$5,000 in total
$.05 per share
Question 2. 2. Which one of the following is not necessary in order for a corporation to pay a cash dividend?
Adequate cash
Approval of stockholders
Declaration of dividends by the board of directors
Retained earnings
Question 3. 3. Dividends Payable is classified as a
long-term liability.
contra stockholders’ equity account to Retained Earnings.
current liability.
stockholders’ equity account.
Question 4. 4. The per share amount normally assigned by the board of directors to a small stock dividend is
the market value of the stock on the date of declaration.
the average price paid by stockholders on outstanding shares.
the par or stated value of the stock.
zero.
Question 5. 5. Each of the following decreases retained earnings except a
cash dividend.
liquidating dividend.
stock dividend.
All of these decrease retained earnings.
Question 6. 6. A corporation is not committed to a legal obligation when it declares
a cash dividend.
either a cash dividend or a stock dividend.
a stock dividend.
a distribution date.
Question 7. 7. Dividends are predominantly paid in
earnings.
property.
cash.
stock.
Question 8. 8. A stockholder who receives a stock dividend would
expect the market price per share to increase.
own more shares of stock.
expect retained earnings to increase.
expect the par value of the stock to change.
Question 9. 9. Which of the following is not a significant date with respect to dividends?
The declaration date
The incorporation date
The record date
The payment date
Question 10. 10. The per share amount normally assigned by the board of directors to a large stock dividend is
the market value of the stock on the date of declaration.
the average price paid by stockholders on outstanding shares.
the par or stated value of the stock.
zero.
