Question 1

In each of the following situations, what is the amount of the profit or loss? In each situation, what accounts will be debited and credited, and for what amount, in the journal entry to close the Income Summary account?
1. The total of the debit column in the Income Statement section of the worksheet was $84,000 and the total of the credit column in that section was $74,000.
2. The total in the debit column of the Income Statement section was $600,000 and the total of the credit column was $700,000.
3. The total of the debit column in the Balance Sheet section was $90,000 and the total of the credit column in that section was $82,000.

Accepted Answer

1. There was a loss of $10,000. Credit I...

Question 2

Corporations are required to make quarterly estimated tax payments based on estimated net income and tax expense.

Accepted Answer

A) True 
 B)False

Question 3

A corporation's own capital stock that has been reacquired is called--------- .

Accepted Answer

The answer of A corporation's own capital stock that has...

Question 4

Information from the Income Statement columns of Lincoln Corporation's worksheet on December 31, 2019, is shown below.
 
1. What is the amount of net income before income tax?
2. What is the amount of income tax on the net income? Use the tax rates set forth below.
3. The corporation paid $21,000 through quarterly deposits. What adjustment is recorded for Incom Tax Expense? 4. What is the amount of net income after income tax?

Accepted Answer

1. $109,400; 2. $25,916; 3. Debit Income...

Question 5

Corporations are subject to the same tax filing deadlines as individual taxpayers.

Accepted Answer

A) True 
 B)False

Question 6

Declarations of cash dividends and stock dividends are debited to the Retained Earnings account.

Accepted Answer

A) True 
 B)False

Question 7

A stock dividend transfers:

Accepted Answer

A)  Retained earnings to contributed capital.
B)  Contributed capital to retained earnings.
C)  Contributed capital to assets.
D)  Assets to contributed capital.E) A) and D)
F) B) and D)

Question 8

On the date of declaration of a stock split, a(n)----------is recorded in the general journal.

Accepted Answer

The answer of On the date of declaration of a...

Question 9

The entry to record the appropriation of funds to reacquire its own stock includes a:

Accepted Answer

A)  debit to Treasury Stock-Common.
B)  credit to Treasury Stock-Common.
C)  debit to Retained Earnings.
D)  debit to Retained Earnings Appropriated for Treasury Stock Purchase.E) A) and B)
F) None of the above

Question 10

The income statement of a corporation and a sole proprietorship are similar with the exception of:

Accepted Answer

A)  retained earnings.
B)  revenues reported.
C)  income taxes.
D)  total expenses of the corporation.E) A) and D)
F) A) and C)

Question 11

The record date is the date:

Accepted Answer

A)  used to determine who will receive the dividend.
B)  on which the board of directors declares the dividend.
C)  on which the dividend is paid.
D)  on which the dividend transaction is recorded in the general journal.E) All of the above
F) B) and C)

Question 12

In each of the following situations, what is the amount of the profit or loss? In each situation, what accounts will be debited and credited, and for what amount, in the journal entry to close the Income Summary account?
1. The total of the debit column in the Income Statement section of the worksheet was $94,000 and the total of the credit column in that section was $104,000.
2. The total in the debit column of the Income Statement section was $200,000 and the total of the credit column was $100,000.
3. The total of the debit column in the Balance Sheet section was $53,000 and the total of the credit column in that section was $55,000.

Accepted Answer

1. There was a profit of $10,000. Debit ...

Question 13

Gender Corporation declared and issued a 10% stock dividend on December 1. Prior to the declaration, Gender's retained earnings were $200,000, shares outstanding were 20,000, $5 par value, common stock with a current market value of $10 per share. Contributed capital will increase (decrease) as a result of recording this stock dividend by:

Accepted Answer

A)  $0.
B)  $10,000.
C)  $(10,000) .
D)  $20,000.E) A) and D)
F) A) and C)

Question 14

The Matt Tress Sofa Company has 11,000 shares of $2 par common stock outstanding. On August 22, 2019, a 3% stock dividend was declared to be distributed on September 30, 2019. The market value of the stock on August 22 was $21; the market value on September 30 was $18. What is the amount to be debited to the Retained Earnings account on August 22?

Accepted Answer

A)  $6,270.
B)  $990.
C)  $5,940.
D)  $6,930.E) A) and C)
F) None of the above

Question 15

The amount of capital acquired from capital stock transactions is referred to as-------- .

Accepted Answer

The answer of The amount of capital acquired from capital...

Question 16

The Deferred Income Tax account represents postponement of taxes payable to a future period.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements regarding the income statements of corporations is not correct?

Accepted Answer

A)  Some corporations include cost of goods sold with the operating expenses.
B)  Some corporations show income tax expense as an operating expense rather than as a deduction from net income before income tax.
C)  If a gain or loss results from a transaction that is highly unusual, is clearly unrelated to routine operations, and is not expected to occur again in the near future, the gain or loss is shown as an operating expense.
D)  Corporations can use a variety of formats for the income statement.E) B) and D)
F) None of the above

Question 18

Which of the following statements is not correct?

Accepted Answer

A)  Corporations must estimate and prepay their income taxes through quarterly tax deposits.
B)  At the end of the year, when the worksheet is prepared, the Income Tax Expense account is adjusted only if the corporation owes additional taxes.
C)  Income Tax Expense may be shown as an operating expense on a corporation's income statement.
D)  On a corporate income statement, the tax effect of each extraordinary item is offset against each gain or loss to show the effect 'net of taxes'.E) B) and D)
F) All of the above

Question 19

On August 10, 2019, a corporation received a donation of land for a future plant site. The land has a fair market value of $800,000. Record the entry to reflect the receipt of this asset as a gift on page 3 of a general journal. Omit the description.

Accepted Answer

The answer of On August 10, 2019, a corporation received...

Question 20

Match between columns
                        Premises:  A financial statement that provides an analysis reconciling the beginning and ending balance of each of the stockholders' equity accounts.
 Capital resulting from the receipt of gifts by a corporation
 Capital acquired from capital stock transactions
 Distribution of the corporation's own stock on a pro rata basis that results in conversion of a portion of the firm's retained earnings to permanent capital
 A formal declaration of an intention to restrict dividends
 Equity account used to record par, or stated, value of shares to be issued as the result of the declaration of a stock dividend
 The cumulative profits and losses of the corporation not distributed as dividends
 When a corporation issues two or more shares of new stock to replace each share outstandin without making any changes in the capital accounts
 Transactions that are highly unusual, clearly unrelated to routine operations, and that do not frequently occur
 The date that dividends are paid
 Stockholders in whose name shares are held on date of record and who will receive a declared dividend
 The total equity applicable to a class of stock divided by the number of shares outstanding
 The date on which the board of directors declares a dividend
 The date on which the specific stockholders to receive a dividend are determined
 A financial statement that shows all changes that have occurred in retained earnings during the period
 A corporation's own capital stock that has been issued and reacquired; the stock must have been previously paid in full and issued to a stockholder
 The amount of taxes that will be payable in the future as a result of the difference between taxable income and income for financial statement purposes in the current year and in past years

Accepted Answer

The Answer of Appropriation of retained earnings and Book value is...

Exam 21: Corporate Earnings and Capital Transactions

Correct Answer
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1. There was a loss of $10,000. Credit I...
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The income statement of a corporation and a sole proprietorship are similar with the exception of:

Correct Answer
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Correct Answer
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1. $109,400; 2. $25,916; 3. Debit Income...
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Corporations are required to make quarterly estimated tax payments based on estimated net income and tax expense.

Correct Answer
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The entry to record the appropriation of funds to reacquire its own stock includes a:

Correct Answer
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A stock dividend transfers:

Correct Answer
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Match the description with the accounting terms.

The record date is the date:

Correct Answer
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Which of the following statements regarding the income statements of corporations is not correct?

Correct Answer
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The Deferred Income Tax account represents postponement of taxes payable to a future period.

Correct Answer
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The amount of capital acquired from capital stock transactions is referred to as-------- .

Correct Answer
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On the date of declaration of a stock split, a(n)----------is recorded in the general journal.

Correct Answer
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Corporations are subject to the same tax filing deadlines as individual taxpayers.

Correct Answer
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On August 10, 2019, a corporation received a donation of land for a future plant site. The land has a fair market value of $800,000. Record the entry to reflect the receipt of this asset as a gift on page 3 of a general journal. Omit the description.

Correct Answer
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Which of the following statements is not correct?

Correct Answer
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Correct Answer
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Declarations of cash dividends and stock dividends are debited to the Retained Earnings account.

Correct Answer
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Correct Answer
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1. There was a profit of $10,000. Debit ...
View Answer

A corporation's own capital stock that has been reacquired is called--------- .

Correct Answer
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Correct Answer
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Exam 21: Corporate Earnings and Capital Transactions

Correct Answerverified1. There was a loss of $10,000. Credit I...View AnswerShow Answer

The income statement of a corporation and a sole proprietorship are similar with the exception of:

Correct AnswerverifiedShow Answer

Correct Answerverified1. $109,400; 2. $25,916; 3. Debit Income...View AnswerShow Answer

Corporations are required to make quarterly estimated tax payments based on estimated net income and tax expense.

Correct AnswerverifiedShow Answer

The entry to record the appropriation of funds to reacquire its own stock includes a:

Correct AnswerverifiedShow Answer

A stock dividend transfers:

Correct AnswerverifiedShow Answer

Match the description with the accounting terms.

The record date is the date:

Correct AnswerverifiedShow Answer

Which of the following statements regarding the income statements of corporations is not correct?

Correct AnswerverifiedShow Answer

The Deferred Income Tax account represents postponement of taxes payable to a future period.

Correct AnswerverifiedShow Answer

The amount of capital acquired from capital stock transactions is referred to as-------- .

Correct AnswerverifiedShow Answer

On the date of declaration of a stock split, a(n)----------is recorded in the general journal.

Correct AnswerverifiedShow Answer

Corporations are subject to the same tax filing deadlines as individual taxpayers.

Correct AnswerverifiedShow Answer

On August 10, 2019, a corporation received a donation of land for a future plant site. The land has a fair market value of $800,000. Record the entry to reflect the receipt of this asset as a gift on page 3 of a general journal. Omit the description.

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Declarations of cash dividends and stock dividends are debited to the Retained Earnings account.

Correct AnswerverifiedShow Answer

Correct Answerverified1. There was a profit of $10,000. Debit ...View AnswerShow Answer

A corporation's own capital stock that has been reacquired is called--------- .

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified
1. There was a loss of $10,000. Credit I...
View Answer

Correct Answer
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1. $109,400; 2. $25,916; 3. Debit Income...
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1. There was a profit of $10,000. Debit ...
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Correct Answer
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