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

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Question 31

Multiple Choice

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What is the total stockholders' equity based on the following account balances? ​ ​

A) $670,000
B) $655,000
C) $640,000
D) $565,000

E) A) and B)
F) All of the above

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Question 32

Multiple Choice

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Nebraska Inc.issues 3,000 shares of common stock for $45,000.The stock has a stated value of $10 per share.The journal entry to record the stock issuance would include a credit to Common Stock for

A) $30,000
B) $45,000
C) $15,000
D) $3,000

E) All of the above
F) C) and D)

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Question 33

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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.

Match each of the following stockholders' equity concepts to the most appropriate term (a-h) . -Corporate income distributed to stockholders

The primary purpose of a stock split is to

If a company has preferred stock,the preferred stock dividend is added to net income when computing earnings per common share.

A company had stock outstanding as follows during each of its first three years of operations: 2,500 shares of 10%,$100 par,cumulative preferred stock and 50,000 shares of $10 par common stock.The amounts distributed as dividends are presented below.Determine the total and per-share dividends for each class of stock for each year by completing the schedule.

On May 1,10,000 shares of $10 par common stock were issued at $30,and on May 7,5,000 shares of $50 par preferred stock were issued at $111.Journalize the entries for May 1 and May 7.

When Wisconsin Corporation was formed on January 1,the corporate charter provided for 100,000 shares of $10 par value common stock.The following transaction was among those engaged in by the corporation during its first month of operation: The corporation issued 8,500 shares of stock at a price of $16 per share. ​ The entry to record the above transaction would include a

On June 5,Belen Corporation reacquired 3,300 shares of its own common stock at $45 per share.On July 15,Belen sold 2,000 of the reacquired shares at $48 per share.On August 30,Belen sold the remaining shares at $42 per share. ​ Journalize the transactions of June 5,July 15,and August 30.

Selected transactions completed by Breezeway Construction during the current fiscal year are as follows: ​ ​ Journalize the transactions.

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 the first year.

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.

A company has 10,000 shares of $10 par common stock outstanding.Prepare entries to record the following:

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.

The cost method of accounting for the purchase and sale of treasury stock is a commonly used method.

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

One of the prerequisites to paying a cash dividend is sufficient retained earnings.

The amount of capital paid in by the stockholders of the corporation is called legal capital.

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