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

On March 4 of the current year, Barefoot Bay, Inc. reacquired 5,000 shares of its common stock at $89 per share. On August 7, Barefoot Bay sold 3,500 of the reacquired shares at $100 per share. The remaining 1,500 shares were sold at $88 per share on November 29. a) Journalize the transaction of March 4, August 7, and November 29. b) What is the balance in Paid-in Capital from Sale of Treasury Stock on December 31 of the current year? c) Why might Barefoot Bay Inc. have purchased the treasury stock?

Free

(Essay)

4.9/5

(43)

Question 1

Correct Answer:

Verified

a) Mar. 4 Treasury Stock 445,000
Cash 445,000
Aug. 7
Cash
350,000
Treasury Stock 3,500 × $89)311,500
Paid-In Capital from Sale of
Treasury Stock
38,500
Nov. 29 Cash
132,000
Paid-In Capital from Sale of
Treasury Stock
1,500
Treasury Stock 1,500 × $89)133,500
b) $37,000 credit
c) Barefoot Bay may have purchased the stock to support the market price of the stock, to provide shares for resale to employees, or for reissuance to employees as a bonus according to stock purchase agreements.

On April 2 a corporation purchased for cash 5,000 shares of its own $10 par common stock at $16 a share. It sold 3,000 of the treasury shares at $19 a share on June 10. The remaining 2,000 shares were sold on November 10 for $12 a share. a) Journalize the entries to record the purchase treasury stock is recorded at cost). b) Journalize the entries to record the sale of the stock.

Free

(Essay)

4.9/5

(33)

Question 2

Correct Answer:

Verified

a) April 2
Treasury Stock 5,000 × $16) 80,000
Cash 80,000
b) June 15
Cash 3,000 × $19)57,000
Treasury Stock 3,000 × $16)48,000
Paid-In Capital from Sale of Treasury
Stock [3,000 × $16 - $19)]
9,000
November 10
Cash 2,000 × $12) 24,000
Paid-In Capital from Sale of Treasury Stock
[2,000 × $16 - $12)] 8,000
Treasury Stock 2,000 × $16)32,000

Match each of the following stockholders' equity concepts to the appropriate term a-h). -Group which meets periodically to establish corporate policies

Free

(Multiple Choice)

4.8/5

(34)

Question 3

Correct Answer:

Verified

Match the following stockholders' equity concepts to the appropriate term a-h). -The date when dividends are actually distributed to stockholders

(Multiple Choice)

4.9/5

(31)

Question 4

Treasury stock shares are

(Multiple Choice)

4.8/5

(30)

Question 5

Treasury stock that had been purchased for $5,600 last month was reissued this month for $8,500. The journal entry to record the reissuance would include a credit to

(Multiple Choice)

4.8/5

(36)

Question 6

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.

(Essay)

4.8/5

(38)

Question 7

Match each of the following stockholders' equity concepts to the most appropriate term a-h). -A class of stock that provides no preference rights to shareholders

(Multiple Choice)

4.9/5

(34)

Question 8

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: Year 1: $10,000 Year 2: 45,000 Year 3: 90,000 Determine the dividends in arrears for preferred stock for the second year.

(Multiple Choice)

4.9/5

(44)

Question 9

Which of the following statements is not true about a 2-for-1 split?

(Multiple Choice)

4.8/5

(36)

Question 10

Before a stock dividend can be declared or paid, there must be sufficient cash.

(True/False)

4.8/5

(36)

Question 11

Match each of the following stockholders' equity concepts to the most appropriate term a-h). -The dollar amount assigned to each share of stock

(Multiple Choice)

4.9/5

(40)

Question 12

What is the total stockholders' equity based on the following data? Common Stock $360,000 Excess of Issue Price Over Par 735,000 Retained Earnings Deficit) 56,000)

(Multiple Choice)

4.8/5

(45)

Question 13

At December 31, Idaho Company had the following ending account balances: Retained Earnings: $250,000 Preferred Stock $100 par, 7% cumulative, 10,000 authorized, 5,000 issued and outstanding): $500,000 Treasury Stock: $40,000 PaidIn Capital in Excess of Par-Common Stock: $625,000 PaidIn Capital in Excess of Par-Preferred Stock: $50,000 Common Stock $5 par value, 500,000 shares authorized, 105,000 issued): $525,000 Prepare the stockholders' equity section of the balance sheet in good form with all of the required disclosures.

(Essay)

4.8/5

(41)

Question 14

On February 13, Epperson Company issue for cash 75,000 shares of no-par common stock with a stated value of $125) at $140. On September 9, Epperson issued at par 15,000 shares of 1%, $60 par preferred stock at par for cash. On November 23, Epperson issued for cash 8,000 shares of 1%, $60 par preferred stock at $70. Journalize the entries to record the February 13, September 9, and November 23 transactions.

(Essay)

4.9/5

(33)

Question 15

When Wisconsin Corporation was formed on January 1, the corporate charter provided for 100,000 share 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

(Multiple Choice)

4.8/5

(36)

Question 16

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.

(Essay)

4.8/5

(46)

Question 17

When no-par common stock with a stated value is issued for cash, the common stock account is credited for an amount equal to the cash proceeds.

(True/False)

4.7/5

(36)

Question 18

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

(Multiple Choice)

4.9/5

(33)

Question 19

Treasury stock that was purchased for $3,000 is sold for $3,500. As a result of these two transactions combined

(Multiple Choice)

4.9/5

(29)

Question 20

Showing 1 - 20 of 207

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

Match each of the following stockholders' equity concepts to the appropriate term a-h). -Group which meets periodically to establish corporate policies

Match the following stockholders' equity concepts to the appropriate term a-h). -The date when dividends are actually distributed to stockholders

Treasury stock shares are

Treasury stock that had been purchased for $5,600 last month was reissued this month for $8,500. The journal entry to record the reissuance would include a credit to

Match each of the following stockholders' equity concepts to the most appropriate term a-h). -A class of stock that provides no preference rights to shareholders

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: Year 1: $10,000 Year 2: 45,000 Year 3: 90,000 Determine the dividends in arrears for preferred stock for the second year.

Which of the following statements is not true about a 2-for-1 split?

Before a stock dividend can be declared or paid, there must be sufficient cash.

Match each of the following stockholders' equity concepts to the most appropriate term a-h). -The dollar amount assigned to each share of stock

What is the total stockholders' equity based on the following data? Common Stock $360,000 Excess of Issue Price Over Par 735,000 Retained Earnings Deficit) 56,000)

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.

When no-par common stock with a stated value is issued for cash, the common stock account is credited for an amount equal to the cash proceeds.

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

Treasury stock that was purchased for $3,000 is sold for $3,500. As a result of these two transactions combined

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

Filters