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Exam 13: Corporations: Organization, Stock Transactions, and Dividends

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Question 101

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Dayton Corporation began the current year with a retained earnings balance of $32,000. During the year, the company corrected an error made in the prior year, which was a failure to record a depreciation expense of $3,000 on equipment. Also, during the current year, the company earned net income of $12,000 and declared cash dividends of $7,000. Compute the year-end retained earnings balance.

A) $34,000
B) $37,000
C) $41,000
D) $44,000

E) None of the above
F) A) and B)

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Question 102

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The following transaction took place for XYZ Corporation:​Nov. 12Declared a total cash dividend of $45,000 for stockholders of record November 20 payable on December 1.​Required (a) Record the journal entries required by these events. (b) Briefly describe the significance of November 20.

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(a)​ (b) The stock ...

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Question 103

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Macy Company has 10,000 shares of 2% cumulative preferred stock of $50 par and 25,000 shares of $75 par common stock. The following amounts were distributed as dividends:​ Determine the dividends per share for preferred and common stock for each year.

Match each of the following stockholders' equity concepts to the appropriate term (a-h) . -The date that is used to determine the owners of stock who will receive the current dividend

Organizational expenses are classified as intangible assets on the balance sheet.

If 20,000 shares are authorized, 15,000 shares are issued, and 500 shares are held as treasury stock, a cash dividend of $1 per share would amount to $15,000.

A corporation is a separate entity for accounting purposes but not for legal purposes.

The par value of stock is an assigned per-share amount defined in many states as legal capital.

The price at which a stock can be sold depends on a number of factors. Which of the following is not one of those factors?

The reduction in the par or stated value of common stock, accompanies by the issuance of a proportionate number of additional shares, is called a stock split.

Characteristics of a corporation include

On March 4 of the current year, Barefoot Bay, Inc. reacquired 5,000 shares of its common stock at $89 per share. On August 7, Barefoot Bay sold 3,500 of the reacquired shares at $100 per share. The remaining 1,500 shares were sold at $88 per share on November 29.Required

On February 1 of the current year, Motor, Inc. issued 700 shares of $2 par common stock to an attorney in return for preparing and filing the articles of incorporation. The value of the services is $9,600. Journalize this transaction.

A corporation has 50,000 shares of $25 par stock outstanding. If the corporation issues a 3-for-1 stock split, the number of shares outstanding after the split will be

Match each of the following stockholders' equity concepts to the most appropriate term (a-h) . -The number of shares sold to stockholders

If common stock is issued for an amount greater than par value, the excess should be credited to

On April 1, 10,000 shares of $5 par common stock were issued at $22, and on April 7, 5,000 shares of $50 par preferred stock were issued at $104. Journalize the entries for April 1 and 7.

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:​ Determine the dividends per share for preferred and common stock for each year.

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. $\begin{array} { l r } \text { Common Stock, } \$ 50 \text { par } & \$ 1,250,000 \\\text { Paid-In Capital in Excess of Par } & 800,000 \\\text { Paid-In Capital from Sale of Treasury Stock } & 42,000 \\\text { Retained Earnings } & 4,350,000 \\\text { Treasury Stock } & 155,000\end{array}$

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends:Year 1$10,000Year 245,000Year 390,000​Determine the dividends per share for preferred and common stock for the second year.