Question Details

Restricting retained earnings for the cost of treasury stock 



	1.	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.	$1,400
c.	$900
d.	$1,200

	2.	Kramer Co. had retained earnings of $30,000 on the balance sheet but disclosed in the footnotes that $6,000 of retained earnings was restricted for building expansion and $2,000 was restricted for bond repayments.  Cash of $4,000 had been set aside for the plant expansion. How much of retained earnings is available for dividends?
a.	$22,000
b.	$24,000
c.	$30,000
d.	$18,000

	3.	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.	1-for-5.
d.	3-for-1.

	4.	Restricting retained earnings for the cost of treasury stock purchased is a
a.	contractual restriction.
b.	legal restriction.
c.	stock restriction.
d.	voluntary restriction.
	5.	A prior period adjustment that corrects income of a prior period requires that an entry be made to
a.	an income statement account.
b.	a current year revenue or expense account.
c.	the retained earnings account.
d.	an asset account.




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