Question

1.On June 1, 2019, Lilo Inc. announces a 3:1 stock split on its 30,000 shares of $6 par value common stock outstanding. The memo announcing the split will include information about the increase in the number of stocks outstanding which will be:  *

$2

$18

10,000 shares

90,000 shares

2.On the dividend payment date *

a dividend becomes a current obligation

no entry is required

an entry may be required if it is a stock dividend

dividends payable is debited

3.ABC Company is incorporated on January 1, 2018. During its first year, the corporation issued 20,000 shares of $10 par value preferred stock and 300,000 shares of $1 par value common. At December 31, 2018, the company declared $50,000 cash dividend to be paid on January 13, 2019. The record on payment date will include: *

Debit Cash Dividend

Credit Cash Dividend

Debit Dividend Payable

Credit Dividend Payable

4.The maturity date of a 60- day note date March 10, 2020 is *

May 7, 2020

May 8, 2020

May 9, 2020

May 10, 2020

Answer 1

1.Answer: 90,000 shares

Explanation:

Shares before stock split : 30,000 shares

Stock-split: 3:1

Shares after stock split: 3 x 30,000 shares = 90,000 shares

2. Answer: Dividend payable is debited

Explanation:

On dividend payment date entry will be,

Date	Account title	Debit	Credit
	Dividends payable	Amount
	Cash		Amount
	[To record payment of dividends]

Thus, Dividend payable is debited.

3.Answer: Debit Dividend Payable

Explanation:

Entry on payment date to be,

Date	Account title	Debit	Credit
Jan 13,2019	Dividends payable	$50,000
	Cash		$50,000
	[To record payment of dividends]

Thus, Dividend payable is debited.

4.Answer:May 9,2020

Explanation:

Days in March [31-10]	21
Days In April	30
Days till May 9	9	Due date is May 9
Total days	60