Reference no: EM132480580
Question 1 - A company declares a cash dividend on its common stock on December 24, Year One, payable to owners of record on January 2, Year Two, with checks to be mailed on January 9, Year Two. Which of the following statements is true?
A. The company will have a liability on its December 31, Year One balance sheet and the owners will record a receivable on their December 31, Year One balance sheet
B. Both the revenue and the dividend paid will be recorded by the two companies on January 9, Year Two when payment is made
C. This dividend is recorded by the company as an operating expense on its income statement
D. The owners will record the revenue from this transaction in Year Two but the company will record the effect of the dividend in Year One
Question 2 - The Mills Corporation was started several years ago and incorporated in the state of Delaware. The company was granted the authorization to issue 250,000 shares of $10 per share par value common stock. At that time, 30,000 shares were issued for cash of $12 per share. Last year, another 10,000 shares were issued for cash of $19 per share. Early in the current year, the company issued 12,000 shares of this common stock as a stock dividend when the fair value was $30 per share. For the 52,000 shares that are now outstanding, what amount should be reported in stockholders' equity as additional paid-in capital?
A. $390,000
B. $310.000
C. $220,000
D. $150,000
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