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Exam 12: Corporations: Organization, Stock Transactions, and Dividends

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Question 31

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When no-par stock is issued, Common Stock is credited for the selling price of the stock issued.

A) True
B) False

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Question 32

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Using the following accounts and balances, prepare the stockholders' equity section of the balance sheet. Fifty thousand shares of common stock are authorized, and 5,000 shares have been reacquired.​ What is the total amount of paid-in capital that would be reported on the statement of stockholders' equity?

A) $2,050,000
B) $2,092,000
C) $4,350,000
D) $6,287,000

E) C) and D)
F) B) and D)

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Question 33

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When a corporation issues stock at a premium, it reports the premium as an other income item on the income statement.

For the current year ended, ABC had the following transactions: - Issued 10,000 shares of $2.00 par value common stock for $12.00 per share.- Issued 3,000 shares of $50 par value 6% preferred stock for $70 per share.- Purchased 1,000 shares of previously issued common stock for $15.00 per share.- Reported net income of $200,000.- Declared and paid a total dividend of $40,000.​ Assume that retained earnings had a beginning balance of $75,000.The company does not have any stock outstanding as of the beginning of the current year.​ a.Treasury stock b.Retained earnings c.Preferred stock d.Excess of issue price over par (preferred)e.Common stock f.Total paid-in capital g.Excess of issue price over par (common)h.Total stockholders' equity -$330,000

Before a stock dividend can be declared or paid, there must be sufficient cash.

On February 13, Epperson Company issue for cash 75,000 shares of no-par common stock (with a stated value of $125) at $140. On September 9, Epperson issued at par 15,000 shares of 1%, $60 par preferred stock at par for cash. On November 23, Epperson issued for cash 8,000 shares of 1%, $60 par preferred stock at $70.​ Journalize the entries to record the February 13, September 9, and November 23 transactions.

The date on which a cash dividend becomes a binding legal obligation is on the

When no-par common stock with a stated value is issued for cash, the common stock account is credited for an amount equal to the cash proceeds.

Firefly, Inc. reported the following results for the year ending July 31: Prepare a retained earnings statement for the fiscal year ended July 31.

The declaration of a cash dividend decreases a corporation's stockholders' equity and decreases its assets.

On April 2 a corporation purchased for cash 5,000 shares of its own $10 par common stock at $16 a share. It sold 3,000 of the treasury shares at $19 a share on June 10. The remaining 2,000 shares were sold on November 10 for $12 a share.​ (a)Journalize the entries to record the purchase (treasury stock is recorded at cost).(b)Journalize the entries to record the sale of the stock.

Which of the following is not a right possessed by common stockholders of a corporation?

Match each of the following stockholders' equity concepts to the appropriate term (a-h). -Corporate income distributed to stockholders A)articles of incorporation B)limited liability C)bylaws D)corporation E)public corporation F)board of directors G)private corporation H)dividends

Match each of the following stockholders' equity concepts to the appropriate term (a-h). -Document which formally creates a corporation A)articles of incorporation B)limited liability C)bylaws D)corporation E)public corporation F)board of directors G)private corporation H)dividends

The retained earnings statement may be combined with the income statement.

Which statement below is not a reason for a corporation to buy back its own stock?

The excess of sales price of treasury stock over its cost should be credited to

Big Bluestem Inc. reported the following results for the year ending April 30: Prepare a retained earnings statement for the fiscal year ended April 30.

Match each of the following stockholders' equity concepts to the appropriate term (a-h). -A company whose shares can be bought and sold in public markets A)articles of incorporation B)limited liability C)bylaws D)corporation E)public corporation F)board of directors G)private corporation H)dividends

Par value