1. A 3-for-1 common share split will increase total shareholders' equity but reduce the legal capital per common share. - T/F

2. A statement of retained earnings shows the same information as a corporation income statement. T/F

3. A shareholder who receives a stock dividend would

a) expect the market price per share to increase.

b) own more shares.

c) expect retained earnings to increase.

d) expect the value of the shares to change.

4. When stock dividends are distributed,

a) Common Stock Dividends Distributable is decreased.

b) Retained Earnings is decreased.

c) Cash is decreased.

d) no entry is necessary if it is a large stock dividend.

5. The declaration of a stock dividend will

a) increase contributed capital.

b) change the total of shareholders' equity.

c) increase total liabilities.

d) increase total assets.