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

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Question 81

Multiple Choice

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Match each of the following stockholders' equity concepts to the most appropriate term (a-h) . -The maximum number of shares a company can issue to shareholders

A) Authorized shares
B) Issued shares
C) Outstanding shares
D) Par value
E) Common stock
F) Preferred stock
G) Paid-In Capital in Excess of Par
H) Transfer agent

I) C) and H)
J) F) and G)

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Question 82

Multiple Choice

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The two main sources of stockholders' equity are

A) investments by stockholders and net income retained in the business
B) investments by stockholders and dividends paid
C) net income retained in the business and dividends paid
D) investments by stockholders and purchases of assets

E) A) and C)
F) C) and D)

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Question 83

Multiple Choice

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Significant changes in stockholders' equity are reported on the

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 2:45,000Year 3:90,000​Determine the dividends per share for preferred and common stock for the first year.

The entry to record the issuance of 150 shares of $5 par common stock at par to an attorney in payment of legal fees for organizing the corporation includes a credit to

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

Match each of the following stockholders' equity concepts to the appropriate term (a-h) . -Creditors cannot pursue stockholders' personal assets to satisfy claims

Par value

Sabas Company has 20,000 shares of $100 par, 1% noncumulative 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.

Torre Company has the following stockholders' equity account balances in stockholders' equity on December 31.​Common Stock, $5 par (60,000 shares issued)$300,000Paid-In Capital in Excess of Par-Common Stock600,000Preferred Stock, $100 par (5,000 shares issued)500,000Paid-In Capital in Excess of Par-Preferred Stock100,000Retained Earnings200,000Treasury Stock (cost, $12 per share)60,000​ (a)How many shares of treasury stock are owned? (b)What was the average market price per share at which common stock was issued? (c)What was the average market price per share at which preferred stock was issued? (d)What is the total value of the paid-in capital portion of stockholders' equity? (e)What is the total value of stockholders' equity? (f)How many shares of common stock are outstanding? (g)If net income for the year was $75,000 and a preferred stock dividend of $20,000 was paid, what was the beginning value of retained earnings? How much is earnings per share for the year?

The following account balances appear on the balance sheet of Osgood Industries:?Common Stock (300,000 shares authorized, $100 par)$10,000,000Paid-In Capital in Excess of Par-Common Stock2,000,000Retained Earnings45,000,000?The board of directors declared a 2% stock dividend when the market price of the stock was $135 per share.?Required

Treasury Stock is listed in the Stockholders' equity section on the balance sheet.

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.

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

A restriction/appropriation of retained earnings

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.

A large public corporation normally uses registrars and transfer agents to maintain the records of stockholders.

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

Assume that retained earnings had a beginning balance of $75,000. Match the following amounts to the appropriate term (a-h) . -Excess of Issue Price over Par (Common) = Excess Price of Common Stock × Number of Shares of Common Stock Issued = ($12 - $2) × 10,000 = $100,000

A company has 10,000 shares of $10 par common stock outstanding. Prepare entries to record the following: (a)Purchased 1,000 shares of treasury stock at $12. The treasury stock is accounted for by the cost method. There were no previous purchases of treasury shares. (b)Sold 500 shares of treasury stock at $15. (c)Purchased equipment for $75,000, paying $25,000 in cash and issuing 4,000 shares of common stock for the remaining. (d)Sold 500 shares of treasury stock at $11.