10.5 Account for stock dividends and stock splits
1) A stock dividend affects total shareholders' equity.
2) A stock dividend increases the shareholder's percentage of stock held.
3) A corporation may declare stock dividends when there is not enough cash to pay a cash dividend.
4) The declaration of a stock dividend:
A) creates a liability.
B) creates an asset.
C) creates a revenue.
D) does not create a liability.
E) creates an expense.
5) A stock split is recorded as a(n):
A) regular journal entry.
B) memorandum entry.
C) adjusting entry.
D) closing entry.
E) correcting entry.
6) Tammy Corporation has 350,000 common shares outstanding. They have declared a 5% stock dividend. The current market price of the common shares is $7.50/share. The amount that will be debited to retained earnings on the date of declaration is:
7) Cody's Western Wear has 2,000 common shares outstanding. During the current year, the company distributed a 10% stock dividend. The market value of the stock at that time was $16/share. After the distribution, should Cody's total shareholders' equity change? If so, by how much?
8) A distribution of a corporation's own shares to its shareholders is a called a __________.
9) What are the three dates associated with a stock dividend?