3. Financial Reporting for Entities

Dividends — Quiz

Test your understanding of dividends with 5 practice questions.

Practice Questions

Question 1

A company declares a 30% stock dividend when the market price per share is $25 and the par value per share is $1. There are 500,000 shares outstanding. What is the total amount transferred from retained earnings for this stock dividend?

Question 2

Which of the following best describes the effect of a scrip dividend on a company’s liabilities?

Question 3

A company declares a cash dividend of $1 per share on 600,000 shares, but 50,000 of these shares are treasury shares. What is the total amount of cash dividends payable?

Question 4

A company declares a property dividend by distributing equipment with a fair value of $120,000 and a book value of $90,000. What is the impact on retained earnings upon declaration of the property dividend?

Question 5

A company with $2,000,000 in retained earnings declares a 15% stock dividend. There are 400,000 shares outstanding with a par value of $2 per share and a market price of $30 per share. What is the total amount transferred from retained earnings?