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Problem 5 Continued 5.3. Which of the following statements is FALSE? A) A large stock dividend can be accounted for as a stock split. B) Accounting treatment of a stock split is to make no journal entry. C) Mandatorily redeemable preferred shares must be reported as a liability. D) Stock issuance cost is an expense that reduces net income in the issuance year. 5.4. On October 1 , the board of directors declares a cash dividend, to be paid October 30 . The date of record is October 15 and the ex-dividend date is Oct. 14. Which of the following investors is NOT entitled to recelve the declared dividend? A) Anna who sells shares on October 16. B) Barry who purchases shares on October 13. C) Chris who purchases shares on October 15. D) Doug who sells shares on October 15. 5.5. In a defined contribution pension plan, the journal entry used to record a company's contribution to the plan involves A) a debit to Pension Expense, and a credit to cash. B) a debit to Plan Assets, and a credit to cash. C) a debit to PBO, and a credit to Plan Assets. D) a debit to Pension Expense, and a credit to Plan Assets. 5.6. Amortizing net gains from a defined benefit pension plan will: A) increase shareholders' equity. B) increase retained earnings. C) decrease retained earnings. D) decrease shareholders' equity. 5.7. Which of the following is not a potential component of pension expense? A) Prior service cost. B) Amortization of prior service cost. C) Amortization of gains and losses from a defined benefit pension plan. D) Service cost

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