Reference no: EM132611119

Questions -

Q1. Blue Spruce's Pumping, Inc. has 19200, $4, cumulative preferred shares issued at $170, and 9100 common shares issued at $1, at December 31, 2021. If the board of directors declares a $59000 dividend, the

$59000 will be held as restricted retained earnings and paid out at some future date.

preferred shareholders will receive 1/10th of what the common shareholders will receive.

preferred shareholders will receive $29500 and the common shareholders will receive $29500.

preferred shareholders will receive the entire $59000.

Q2. What is the closing entry required for cash dividends?

Cash Dividends

Retained Earnings

Retained Earnings

Cash Dividends

Income Summary

Cash Dividends

Cash Dividend

Income Summary

Q3. Swifty Limited issued 2000 common shares in payment of its lawyer's bill of $8900. Swifty Limited assured the lawyer that the shares would be worth $10900 within one year. The bill was for services performed in helping the company incorporate. Southern should record this transaction by debiting:

Common Shares for $8900.

Common Shares for $10900.

Legal Fees Expense for $10900.

Legal Fees Expense for $8900.

Q4. Wildhorse Inc. reported sales of $845000, cost of goods sold of $504000, and other expenses totalled $182000. If the company's corporate tax rate is determined to be 17%, how much would Wildhorse report as income tax expense in the year?

$112710

$57970

$27030

$159000

Q5. A distribution of a corporation's profit to its shareholders is referred to as

wages and salaries expense.

a dividend.

a share distribution.

a shareholder bonus.