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Exam 11: Corporations: Organization, Stock Transactions, and Dividends

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Question 61

True/False

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The net increase or decrease in Retained Earnings for a period is recorded by closing entries.

A) True
B) False

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Question 62

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The primary purpose of a stock split is to reduce the number of shares outstanding in order to encourage more investors to enter the market for the company's shares.

A) True
B) False

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Question 63

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The par value per share of common stock represents the

On January 1, Year 1, a company had the following transactions: - Issued 10,000 shares of $2.00 par common stock for $12.00 per share. - Issued 3,000 shares of $50 par, 6% cumulative preferred stock for $70 per share. - Purchased 1,000 shares of previously issued common stock for $15.00 per share. The company had the following dividend information available: Year 1 - No dividend paid Year 2 - Paid a $2,000 total dividend Year 3 - Paid a $20,000 total dividend Year 4 - Paid a $25,000 total dividend Using the following format, fill in the correct values for each year:

On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with a current market price of $73. Journalize this transaction.

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.

On April 10, Maranda Corporation issued for cash 11,000 shares of no-par common stock at $25. On May 5, Maranda issued at par 1,000 shares of 4%, $50 par preferred stock for cash. On May 25, Maranda issued for cash 15,000 shares of 4%, $50 par preferred stock at $55. Journalize the entries to record the April 10, May 5, and May 25 transactions.

When a stock dividend is declared, which of the following accounts is credited?

The amount of a corporation's retained earnings that has been restricted/appropriated should be reported in the notes to the financial statements.

Sabas Company has 40,000 shares of $100 par, 1% preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends: Year 1: $ 50,000 Year 2: 90,000 Year 3: 130,000 Determine the dividends per share for preferred and common stock for each year.

When the board of directors declares a cash or stock dividend, this action decreases retained earnings.

Stockholders' equity

Match the following stockholders' equity concepts to the appropriate term a-h) . -Cash distribution of a company's earnings to stockholders

Preferred stockholders must receive their current-year dividends before the common stockholders can receive any dividends.

While some businesses have been granted charters under state laws, most businesses receive their charters under federal laws.

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 authorized stock of a corporation

Match each of the following stockholders' equity concepts to the appropriate term a-h) . -The rules and procedures for conducting a corporation's affairs

For accounting purposes, stated value is treated the same way as par value.

The cost of treasury stock is deducted from total paid-in capital and retained earnings in determining total stockholders' equity.