Exam 11: Reporting and Interpreting Stockholders Equity

A company reported total stockholders' equity of $340,000 on its balance sheet dated December 31,2018.During the year ended December 31,2019,the company reported net income of $40,000,declared and paid a cash dividend of $8,000,declared and distributed a 10% stock dividend with a $10,000 total market value,issued additional common stock for $60,000,and paid $12,000 to purchase treasury stock.What is total stockholders' equity as of December 31,2019?

Three dates that are significant for cash dividends are described in each part below. Part A: Name each of the described dates. Part B: Prepare the journal entry for each date.Assume a $25,000 cash dividend.

Shares of stock held as treasury stock do not have voting rights or the right to receive dividends.

Which of the following is not a primary advantage of a general partnership relative to a corporation?

Total stockholders' equity of Grasse Company is not affected when a stockholder sells shares of Grasse Company stock to another stockholder.

The issue of $1 par value common stock for $10 per share results in a $9 credit to the Additional paid-in capital account for each share issued.

Common stockholders have voting rights and can declare cash dividends.

Wendell Company provided the following pertaining to its accounting year that ended December 31,2019: • Common stock with a $10,000 par value was sold for $50,000 cash • Cash dividends totaling $20,000 were declared,of which $15,000 were paid • Net income was $70,000 • A 5% stock dividend resulted in a common stock distribution,which had a $5,000 par value and a $23,000 market value • Treasury stock repurchased in a prior year for $9,000 was resold for $7,000 and in the journal entry to record the sale,Additional paid-in capital was debited for the amount of the difference between the repurchase price and the resale price - What is the amount of increase in Wendell's common stock account during the year 2019?

Which of the following statements is true about a partnership?

Chicago Clock Corporation issued a 3-for-2 stock split of its common stock,which had a par value of $100 before the split.What dollar amount of retained earnings should be transferred to the common stock account?

Rye Company has provided the following information: • Weighted average number of outstanding common shares,200,000 • Net income,$500,000 • Number of authorized common shares,400,000 • Number of treasury shares,25,000 If Rye has issued 225,000 shares,what is Rye's earnings per share (EPS)?

Which of the following statements is correct?

A company reported total stockholders' equity of $540,000 on its balance sheet dated December 31,2018.During the year ended December 31,2019,the company reported net income of $60,000,declared and paid a cash dividend of $18,000,declared and distributed a 10% stock dividend with a $15,000 total market value,issued additional common stock for $70,000,and resold treasury stock for $15,000 that it had purchased in 2018 for $12,000.What is total stockholders' equity as of December 31,2019?

Wedge Corporation has the following capital stock outstanding: $1 par value common stock,250,000 shares. 8% preferred stock,par $100,5,000 shares,cumulative,with 2 years in arrears. Cash dividends of $150,000 were declared and paid near the end of the current year. A.Calculate the dividends paid to the preferred stockholders. B.Calculate the dividends paid to the common stockholders.

When a company acquires treasury stock,assets and stockholders' equity both decrease.

Stockholders' equity decreases when a company purchases treasury stock.

Survivor Company was formed on January 1,2019 by selling and issuing 20,000 shares of common stock at $15 per share.On December 1,2019,the company declared a cash dividend of $10,000,which will be paid in cash on January 15,2020. A.Prepare the journal entry to record the sale and issuance of the common stock on January 1,2019 under each of the following independent assumptions: 1.The common stock has a par value of $10 per share. 2.The common stock was no-par with a stated value of $5 per share. 3.The common stock was no-par and had no stated value. B.Prepare the journal entry to record the dividend declaration on December 1,2019. C.Prepare the journal entry to record payment of the dividend on January 15,2020.

The statement of stockholders' equity is one of the four financial statements required by GAAP.

The declaration and issuance of a stock dividend results in a reduction of the issuing corporation's total stockholders' equity.

The following information is provided for Bold Company for the year 2019: • Preferred stock,6%,$50 par value,1,000 shares issued and outstanding • Common stock,$100 par value,2,000 shares issued and outstanding • Dividends in arrears for three prior years (2016-2018) • Total dividends declared and paid in 2019 were $50,000. - Assuming the preferred stock is noncumulative,what amount of the 2019 dividend declaration for the amount of dividends in arrears was recorded with a credit to the Dividends payable account on the date of declaration?