Direct costs incurred to sell stock, such as underwriting costs, should be accounted for as1-   a reduction of additional paid-in capital.2-   an expense of the period in which the stock is issued.3-   an intangible asset.

Whaley Strings, Inc. has outstanding 600,000 shares of $2 par common stock and 120,000 shares of no-par 6% preferred stock with a stated value of $5. The preferred stock is cumulative and nonparticipating. Dividends have been paid every year except the past two years and the current year. Assuming that $225,000 will be distributed as a dividend in the current year, how much will the common stockholders receive?

On January 1, 2029, Winterberry Corporation had 110,000 shares of its $5 par value common stock outstanding. On June 1, the corporation acquired 10,000 shares of stock to be held in the treasury. On December 1, when the stock’s market price was $15, the corporation declared a 15% stock dividend to be issued to stockholders of record on December 16, 2029. What was the impact of the 15% stock dividend on the balance of the retained earnings account?

Dividends are not paid on

Hemingway Corporation owned 40,000 shares of Mega Watt Corporation. These shares were purchased in 2025 for $360,000. On November 15, 2029, Hemingway declared a property dividend of one share of Mega Watt for every ten shares of Hemingway held by a stockholder. On that date, when the market price of Mega Watt was $28 per share, 360,000 shares of Hemingway were outstanding. What gain and net reduction in retained earnings would result from this property dividend?

Gomez Company issues 6,000 shares of its $5 par value common stock with a fair value of $25 per share and 9,000 shares of its $15 par value preferred stock with a fair value of $20 per share for a lump sum of $310,000. The amount of the proceeds allocated to the common stock is

The stockholders’ equity of Linville Gorge Company at July 31, 2029, is presented below: Common stock, par value $20, authorized 400,000 shares;       issued and outstanding 160,000 shares                                                           $3,200,000Paid-in capital in excess of par                                                                                  160,000Retained earnings                                                                                                      650,000                                                                                                                              $4,010,000 On August 1, 2029, the board of directors of Linville Gorge declared a 15% stock dividend on common stock, to be distributed on September 15th. The market price of Linville Gorge’s common stock was $70 on August 1, 2029, and $76 on September 15, 2029. What is the amount of the debit to retained earnings due to the declaration and distribution of this stock dividend?

Gulf Shores Corporation owned 15,000 shares of San Marcos Corporation. These shares were purchased in 2025 for $135,000. On November 15, 2029, Gulf Shores declared a property dividend of one share of San Marcos for every ten shares of Gulf Shores held by a stockholder. On that date, when the market price of San Marcos was $28 per share, there were 135,000 shares of Gulf Shores outstanding. What gain and net reduction in retained earnings would result from this property dividend?

Mr. Gibson Corporation owned 20,000 shares of Old Towne Corporation’s $5 par value common stock. These shares were purchased in 2025 for $225,000. On September 15, 2029, Mr. Gibson declared a property dividend of one share of Old Towne for every ten shares of Mr. Gibson held by a stockholder. On that date, when the market price of Old Towne was $35 per share, there were 180,000 shares of Mr. Gibson outstanding. What NET reduction in retained earnings would result from this property dividend?

On January 1, 2029, Singing River, Inc. declared a 10% stock dividend on its common stock when the fair value of the common stock was $30 per share. Stockholders’ equity before the stock dividend was declared consisted of: Common stock, $10 par value, authorized 200,000 shares;        issued and outstanding 120,000 shares                                                          $1,200,000Additional paid-in capital on common stock                                                            150,000Retained earnings                                                                                                       700,000Total stockholders’ equity                                                                                     $2,050,000 What was the effect on Singing River’s retained earnings due to the above transaction?