16.       Stock dividends and stock splits have the following effects on retained earnings: Stock Splits Stock Dividends a.       Increase                 No change b.      Decrease                 Decrease c.     No change               No change d.     No change                Decrease 17.       Somento Forest Inc. has 10,000 shares of 6%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2014. What is the annual dividend on the preferred stock? a.   $60 per share b.   $60,000 in total c.   $100,000 in total d.   $0.60 per share 18.       A prior period adjustment that corrects income of a prior period requires that an entry be made to a.   an income statement account. b.   the retained earnings account. c.   a current year revenue or expense account. d.   an asset account. 19.       The following selected amounts are available for Vizio Company.             Retained earnings (beginning)             $1,600             Net loss                                                     300             Cash dividends declared                          200             Stock dividends declared                         200 What is its ending retained earnings balance? a. $1,300 b. $900 c.   $1,400 d.   $1,200 20.       Bento, Inc. had 500,000 shares of common stock outstanding before a stock split occurred, and 1,500,000 shares outstanding after the stock split. The stock split was a.   2-for-5. b.   5-for-1. c.   3-for-1 d.   1-for-5. PROBLEM 1 On January 1, 2010, Anderson Corporation had 60,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred: Mar.      1      Issued 30,000 shares of common stock for $400,000. June     1      Declared a cash dividend of $1.50 per share to stockholders of record on June 15. June   30      Paid the $1.50 cash dividend. Dec.     1      Purchased 10,000 shares of common stock for the treasury for $20 per share. Dec.    15     Declared a cash dividend on outstanding shares of $2 per share to stockholders     of record on December 31. Instructions Prepare journal entries to record the above transactions. Use the template below . Date Account Debit Credit PROBLEM 2 The following information is available for Grey Goose Inc.: Beginning retained earnings                                             $600,000 Cash dividends declared                                                      40,000 Net income for 2014                                                           100,000 Stock dividend declared                                                       10,000 Understatement of last year's depreciation expense           20,000 Instructions Based on the preceding information, prepare a retained earnings statement for 2014 in the box below. GREY GOOSE INC. Retained Earnings Statement F.

1. 16. Stock dividends and stock splits have the following
effects on retained earnings:
Stock Splits
Stock Dividends
a. Increase No change
b. Decrease Decrease
c. No change No change
d. No change Decrease
17. Somento Forest Inc. has 10,000 shares of 6%, $100 par
value, cumulative preferred stock and 100,000 shares of $1 par
value common stock outstanding at December 31, 2014. What is
the annual dividend on the preferred stock?
a. $60 per share
b. $60,000 in total
c. $100,000 in total
d. $0.60 per share
18. A prior period adjustment that corrects income of a
prior period requires that an entry be made to
a. an income statement account.
b. the retained earnings account.
c. a current year revenue or expense account.
d. an asset account.
19. The following selected amounts are available for Vizio
Company.
Retained earnings (beginning) $1,600
Net loss 300

2. Cash dividends declared 200
Stock dividends declared 200
What is its ending retained earnings balance?
a.
$1,300
b.
$900
c. $1,400
d. $1,200
20. Bento, Inc. had 500,000 shares of common stock
outstanding before a stock split occurred, and 1,500,000 shares
outstanding after the stock split. The stock split was
a. 2-for-5.
b. 5-for-1.
c. 3-for-1
d. 1-for-5.
PROBLEM 1
On January 1, 2010, Anderson Corporation had 60,000 shares of
$1 par value common stock issued and outstanding. During the
year, the following transactions occurred:
Mar. 1 Issued 30,000 shares of common stock for
$400,000.
June 1 Declared a cash dividend of $1.50 per share to
stockholders of record on June 15.
June 30 Paid the $1.50 cash dividend.
Dec. 1 Purchased 10,000 shares of common stock for the

3. treasury for $20 per share.
Dec. 15 Declared a cash dividend on outstanding shares of
$2 per share to stockholders of record on December 31.
Instructions
Prepare journal entries to record the above transactions. Use the
template below
.
Date
Account
Debit
Credit

5. PROBLEM 2

6. The following information is available for Grey Goose Inc.:
Beginning retained earnings
$600,000
Cash dividends declared
40,000
Net income for 2014
100,000
Stock dividend declared
10,000
Understatement of last year's depreciation expense
20,000
Instructions
Based on the preceding information, prepare a retained earnings
statement for 2014 in the box below.
GREY GOOSE
INC.
Retained Earnings Statement
For the Year Ended December 31, 2014

7. PROBLEM 3
Timber Ridge Corporation was organized on January 1, 2013.
During its first year, the corporation issued 40,000 shares of $5
par value preferred stock and 400,000 shares of $1 par value
common stock. At December 31, the company declared the
following cash dividends:
2013 $ 7,000
2014 $30,000
2015 $70,000
Instructions
(a) Show the allocation of dividends to each class of stock,
assuming the preferred stock dividend is 5% and not
cumulative.
(b) Show the allocation of dividends to each class of stock,
assuming the preferred stock dividend is 6% and cumulative.
c) Journalize the declaration of the cash dividend at December
31, 2015
(a)
Preferred
Common

8. Total
2013
2014
2015
(b)
Preferred
Common
Total
2013
2014
2015
(c)
Date
Account
Debit
Credit