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

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Question 41

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A company had the following stockholders' equity information available at year-end.​ - Issued 11,000 shares of $2.00 par value common stock for $12.00 per share.- Issued 5,000 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 the preferred stock dividend.​ Calculate the earnings per share for the current year.

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($200,000 - $15,000)...

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Question 42

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Wonder Sales is authorized to issue 100,000 shares of 2%, $100 par preferred stock and 1,000,000 shares of $10 par common stock. Journalize the following transactions.​ (a) On January 2, Wonder Sales issues 5,000 shares of preferred stock for $110 per share and 65,000 shares of common stock at $10 per share.​ (b) On January 25, Wonder Sales issued 250 shares of preferred stock to a Morton Law Firm for settlement of a $36,000 invoice for incorporation services.​ (c) On January 31, Wonder Sales issues 500 shares of common stock to Setup Inc. for fixtures that have a fair market value of $8,500.

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Question 43

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The excess of issue price over par of common stock is termed a(n)

Journalize the following selected transactions completed during the current fiscal year:

Match each of the following stockholders' equity concepts to the appropriate term (a-h). -A company whose shares are not bought or 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

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

Prepare entries to record the following: (a)Issued 1,000 shares of $15 par common stock at $54 for cash.(b)Issued 1,400 shares of no-par common stock in exchange for equipment with a fair market price of $24,000.(c)Purchased 100 shares of treasury stock at $26.(d)Sold 100 shares of treasury stock purchased in (c) at $29.

Treasury stock should be reported in the financial statements of a corporation as a(n)

Carmen Company is a corporation that has issued both preferred and common stock. As of January 1, it had 50,000 shares of 2.75% $100 par, preferred stock outstanding and 250,000 shares of $10 par common stock outstanding. Journalize the following transactions.​ (a) On January 31, the board of directors issues a requirement to purchase 5,000 shares of its common stock at market price. The shares are purchased at a market price of $22 per share.​ (b) On March 15, Carmen declares a dividend on preferred stock of $2.75 per share. The date of record is March 25 and the date of payment is March 31.​ (c) On December 1, Carmen declares a cash dividend on common stock of $0.12 per share. The date of record is December 15 and the date of payment is December 21.​ (d) On December 27, the board orders that 2,500 shares of the treasury stock purchased in (a) be sold. The sale price is $25 per share.

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

Which one of the following would not be considered an advantage of the corporate form of organization?

Which of the following amounts should be disclosed in the stockholders' equity section of the balance sheet?

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

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

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.

Earnings per share

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

If 50,000 shares are authorized, 41,000 shares are issued, and 2,000 shares are reacquired, the number of outstanding shares is 43,000.

A reduction of par or stated value of stock results from a

Paid-in capital may originate from real estate transactions.