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

Farmer Company reports the following amounts for 2015: The 2015 rate of return on common stockholders' equity is

Which one of the following is not necessary in order for a corporation to pay a cash dividend?

The authorized stock of a corporation

If a corporation declares a 10% stock dividend on its common stock, the account to be debited on the date of declaration is

Which of the following statements regarding the date of a cash dividend declaration is not accurate?

In published annual reports

A corporation must be incorporated in each state in which it does business.

Dillon Corporation splits its common stock 2 for 1, when the market value is $40 per share. Prior to the split, Dillon had 50,000 shares of $10 par value common stock issued and outstanding. After the split, the par value of the stock

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

A separate paid-in capital account is used to record each of the following except the issuance of

Retained earnings are occasionally restricted

A net loss

Stockholders of a corporation directly elect

Which of the following is not a right or preference associated with preferred stock?

The effect of a stock dividend is to

The Northern Corporation issues 7,000 shares of $100 par value preferred stock for cash at $120 per share. The entry to record the transaction will consist of a debit to Cash for $840,000 and a credit or credits to

A successful corporation can have a continuous and perpetual life.

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

Jason Thomas has invested $200,000 in a privately held family corporation. The corporation does not do well and must declare bankruptcy. What amount does Thomas stand to lose?

Land Inc. has retained earnings of $800,000 and total stockholders' equity of $2,000,000. It has 300,000 shares of $5 par value common stock outstanding, which is currently selling for $30 per share. If Land declares a 10% stock dividend on its common stock: