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Exam 11: Corporate Reporting and Analysis

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Question 91

Multiple Choice

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The statement of changes in stockholders' equity:

A) Is part of the statement of retained earnings.
B) Shows only the ending balances in stockholders' equity.
C) Describes changes in paid-in capital and retained earnings subcategories.
D) Does not include changes in treasury stock.
E) Is reported by very few companies.

F) B) and D)
G) None of the above

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Question 92

Multiple Choice

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The number of shares a corporation's charter allows it to sell:

A) Issued.
B) Authorized.
C) Subscribed.
D) Outstanding.
E) In treasury.

F) B) and E)
G) A) and E)

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Question 93

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Stockholders' equity consists of paid-in capital and retained earnings.

Large stock dividends are recorded at par or stated value.

________ is the amount of income earned per share of a company's outstanding common stock.

If a company has noncumulative preferred stock,basic earnings per share is equal to net income less preferred dividends declared divided by the number of weighted average common shares outstanding.

Common Stock Dividend Distributable is a liability account.

A corporation with $10 par common stock issues a large stock dividend.The capitalization of retained earnings is equal to:

Dividend yield is defined as the annual cash dividends per share divided by the market price per share of a company's stock.

Given the following information about a corporation's current year activities,compute the retained earnings for the current year.

________ are corrections of material errors in prior period financial statements.

Stock is attractive to investors because stockholders are not liable for the corporation's actions and debts and because stock is easily transferred.

The number of shares that a corporation's charter allows it to sell is the ________ stock.

Fargo Company's outstanding stock consists of 400 shares of noncumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value.During the first three years of operation,the corporation declared and paid the following total cash dividends. -The amount of dividends paid to preferred and common shareholders in year 3 is:

Stock that was reacquired and is still held by the issuing corporation is called:

Small stock dividends are recorded at par or stated value.

The amount of income earned per share of a company's outstanding common stock is known as:

A corporation had the following stock outstanding when the company's board of directors declared a $75,000 cash dividend in the current year: Allocate the cash dividend between the preferred and common stockholders assuming the preferred stock is noncumulative and nonparticipating.

A company had a beginning balance in retained earnings of $400,000.It had net income of $50,000 and declared and paid cash dividends of $55,000 in the current period.The ending balance in retained earnings equals:

A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding.The journal entry to record the payment of the cash dividend is: