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Exam 11: Corporations: Organization, Stock Transactions, and Dividends

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Question 71

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A corporation is a separate entity for accounting purposes but for legal purposes.

A) True
B) False

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Question 72

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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.

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Question 73

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Treasury stock that had been purchased for $6,400 last month was reissued this month for $8,500. The journal entry to record the reissuance would include a credit to

The declaration of a stock dividend decreases a corporation's stockholders' equity and increases its liabilities.

On January 1, 2011 a company had the following data: - issued 10,000 shares of $2.00 par value common stock for $12.00 per share - issued 3,000 shares of $50 par value 6% cumulative preferred stock for $70 per share - purchased 1,000 shares of previously issued common stock for $15.00 per share The company had the following dividend information available: 2011 - No dividend paid 2012 - Paid a $2,000 total dividend 2013 - Paid a $17,000 total dividend 2014 - paid a $32,000 total dividend Using the following format, fill in the correct values for each year; 2011 2012 2013 2014 Common stock dividend Preferred stock dividend Dividends in arrears

The price at which a stock can be sold depends upon a number of factors. Which statement below is not one of those factors?

A sale of treasury stock may result in a decrease in paid-in-capital. All decreases should be charged to the Paid-In-Capital from Sale of Treasury account.

Nexis Corp. issues 1,000 shares of $15 par value common stock at $25 per share. When the transaction is recorded, credits are made to:

Preferred stockholders must receive their current year dividends before the common stockholders can receive any dividends.

Prepare entries to record the following:

The authorized stock of a corporation

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

The financial loss that each stockholder in a corporation can incur is usually limited to the amount invested by the stockholder.

A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9. Subsequently, the company declared a 2% stock dividend on a date when the market price was $10 a share. The effect of the declaration and issuance of the stock dividend is to

If paid-in-capital in excess of par/preferred stock is $30,000, preferred stock is $200,000, paid-in-capital in excess of par/common stock is $20,000, common stock is $525,000, and retained earnings is $105,000 (deficit), the total stockholders' equity is $880,000.

If Everly Company issues 1,000 shares of $5 par value common stock for $75,000, the account

Future Sources, Inc. reported the following results for the year ending July 31, 2012: Prepare a retained earnings statement for the fiscal year ended July 31, 2012.

Cash dividends become a liability to a corporation on the date of record.

A corporation, which had 18,000 shares of common stock outstanding, declared a 3-for-1 stock split.

A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of $120. If the corporation issues a 5-for-1 stock split, the par value of the stock after the split will be: