Exam 11: Reporting and Analyzing Shareholders Equity

Use the following information for questions Air Ace Corporation issues 5,000 preferred shares for $40 per share. -The entry to record the transaction will consist of a debit to Cash for $200,000 and a credit or credits to

The two ways that a corporation can be classified by ownership are

Which of the following shows the proper effect of a stock split and a stock dividend?

Which of the following would not affect the balance of the Retained Earnings account?

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

Retained earnings that are restricted are unavailable for dividends.

Which one of the following is not an ownership right of a common shareholder?

The issue of common shares affects both share capital and retained earnings.

The market capitalization of a company is calculated by multiplying the number of shares authorized by the share price at any given date.

For last year, Roxy Corporation reported profit of $500,000, and paid $125,000 in dividends to the 250,000 preferred shares issued. The weighted average of common shares was 1,500,000 shares. Roxy's earnings per share was

Preferred shares have a contractual preference over common shares in certain areas, but usually do not have the right to vote.

Which of the following is false about the dividend yield ratio?

Which of the following is not a common shareholder right?

JKL Inc. has 10,000, $2, noncumulative preferred shares and 150,000 common shares issued. What is the total annual dividend on the preferred shares?

Indicate the respective effects of the declaration of a cash dividend on the following statement of financial position sections:

Sherbrooke Ltd has 100,000 authorized shares and 80,000 issued shares. After it reacquires and retires 5,000 shares, it will have

The sale of common shares should be recorded as a

Corporations reporting under IFRS have the option of preparing either a statement of changes in equity or a statement of retained earnings.

The main purpose of a stock split is to increase the marketability of the shares.

Investors tend to buy shares with low payout ratios and dividend yields if they are looking for more capital appreciation from the shares.