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

Which of the following statements reflects the transferability of ownership rights in a corporation?

Vega Corporation's December 31, 2015 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, 10,000 shares authorized; 8,500 shares issued \ 170,000 Common stock, \ 10 par value, 1,000,000 shares authorized; 950,000 shares issued, 940,000 shares outstanding 9,500,000 Paid-in capital in excess of par-preferred stock 34,000 Paid-in capital in excess of par-common stock 11,500,000 Retained earnings 3,750,000 Treasury stock ( 15,000 shares) 315,000 Vega's total stockholders' equity was

A corporation can be organized for the purpose of making a profit or it may be not-for-profit.

Vega Corporation's December 31, 2015 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, 10,000 shares authorized; 7,500 shares issued \1 50,000 Common stock, \ 10 par value, 1,000,000 shares authorized; 975,000 shares issued, 960,000 shares outstanding 9,750,000 Paid-in capital in excess of par-preferred stock 30,000 Paid-in capital in excess of par-common stock 13,500,000 Retained earnings 3,750,000 Treasury stock ( 15,000 shares) 315,000 Vega declared and paid a $58,000 cash dividend on December 15, 2015. If the company's dividends in arrears prior to that date were $10,000, Vega's common stockholders received

Book value per share is

The accounting is essentially the same under IFRS and GAAP for

Darman Company issued 700 shares of no-par common stock for $7,700. Which of the following journal entries would be made if the stock has a stated value of $2 per share? a. Cash 7,700 Common Stock 7,700 b. Cash 7,700 Common Stock 1,400 Paid-in Capital in Excess of Par 6,300 c. Cash 7,700 Common Stock 1,400 Paid-in Capital in Excess of Stated Value 6,300 d. Common Stock 7,700 Cash 7,700

Cooke Corporation issues 10,000 shares of $50 par value preferred stock for cash at $60 per share. In the stockholders' equity section, the effects of the transaction above will be reported

A successful corporation can have a continuous and perpetual life.

Dividends in arrears on cumulative preferred stock

Adams Corporation began business by issuing 400,000 shares of $5 par value common stock for $24 per share. During its first year, the corporation sustained a net loss of $40,000. The year-end balance sheet would show

Art, Inc., has 5,000 shares of 4%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2015. There were no dividends declared in 2013. The board of directors declares and pays a $45,000 dividend in 2014 and in 2015. What is the amount of dividends received by the common stockholders in 2015?

Which of the following factors does not affect the initial market price of a stock?

Vega Corporation's December 31, 2015 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, 15,000 shares authorized; 10,000 shares issued \2 00,000 Common stock, \ 10 par value, 1,000,000 shares authorized; 975,000 shares issued, 960,000 shares outstanding 9,750,000 Paid-in capital in excess of par-preferred stock 30,000 Paid-in capital in excess of par-common stock 11,500,000 Retained earnings 3,750,000 Treasury stock (15.000 shares) 315,000 Vega's total paid-in capital was

A prior period adjustment is reported as an adjustment of the beginning balance of Retained Earnings.

Book value per share is computed by dividing total

Information that is not generally reported for each class of stock on the balance sheet is

On January 1, Edison Corporation had 1,000,000 shares of $10 par value common stock outstanding. On March 31, the company declared a 20% stock dividend. Market value of the stock was $18/share. As a result of this event,

A dividend based on paid-in capital is termed a liquidating dividend.

Cash dividends are not a liability of the corporation until they are declared by the board of directors.