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

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Question 41

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When a corporation issues stock at a premium,it reports the premium as an Other income item on the income statement.

A) True
B) False

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Question 42

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A restriction/appropriation of retained earnings establishes cash assets that are set aside for a specific purpose.

A) True
B) False

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Question 43

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Which of the following is not true of a corporation?

Marcos Company,which had 35,000 shares of common stock outstanding,declared a 4-for-1 stock split.​Required

Solar Company has 600,000 shares of $75 par common stock outstanding.On February 13,Solar declared a 3% stock dividend to be issued on April 30 to stockholders of record on March 14.The market price of the stock was $90 per share on February 13.​Journalize the entries required on February 13,March 14,and April 30.

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

For the current year ended, ABC had the following transactions: ​ Issued 10,000 shares of $2 par common stock for $12 per share.Issued 3,000 shares of $50 par, 6% preferred stock for $70 per share.Purchased 1,000 shares of previously issued common stock for $15 per share.Reported net income of $200,000. Declared and paid a total dividend of $40,000. ​ Assume that retained earnings had a beginning balance of $75,000. Match the following amounts to the appropriate term (a-h) . ​ -$60,000

Texas Inc.has 10,000 shares of 6%,$125 par value cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31.What is the annual dividend on the preferred stock?

On April 2 a corporation purchased for cash 5,000 shares of its own $10 par common stock at $16 per share.It sold 3,000 of the treasury shares at $19 per share on June 10.The remaining 2,000 shares were sold on November 10 for $12 per share.​

Which of the following is the appropriate general journal entry to record the declaration of cash dividends?

Which of the following statements concerning taxation is accurate?

A corporation has 50,000 shares of $25 par stock outstanding that has a current market value of $150 per share.If the corporation issues a 5-for-1 stock split,the market value of the stock after the split will be approximately

For the current year ended, ABC had the following transactions: ​ Issued 10,000 shares of $2 par common stock for $12 per share.Issued 3,000 shares of $50 par, 6% preferred stock for $70 per share.Purchased 1,000 shares of previously issued common stock for $15 per share.Reported net income of $200,000. Declared and paid a total dividend of $40,000. ​ Assume that retained earnings had a beginning balance of $75,000. Match the following amounts to the appropriate term (a-h) . ​ -$550,000

Under the corporate form of business organization,

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

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

A stock split results in a transfer at market value from retained earnings to paid-in capital.

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

The declaration and issuance of a stock dividend do not affect the total amount of a corporation's assets,liabilities,or stockholders' equity.

On May 10,a company issued for cash 1,500 shares of no-par common stock (with a stated value of $2)at $14,and on May 15,it issued for cash 2,000 shares of $15 par preferred stock at $58.​Journalize the entries for May 10 and 15,assuming that the common stock is to be credited with the stated value.