Exam 11: Corporations: Organization, Stock Transactions, and Stockholders Equity

The following data is available for Blaine Corporation at December 31, 2018: Based on the data, how many shares of common stock are outstanding?

Under the cost method, Treasury Stock is debited at the price paid to reacquire the shares, and the same amount is credited to Treasury Stock when the shares are sold.

Seven thousand shares of treasury stock of Marker, Inc., previously acquired at $14 per share, are sold at $20 per share. The entry to record this transaction will include a

Retained earnings that are restricted are unavailable for dividends.

Jungle Corporation's stockholders' equity section at December 31, 2017 appears below: On June 30, 2018, the board of directors of Kenner Corporation declared a 15% stock dividend, payable on July 31, 2018, to stockholders of record on July 15, 2018. The fair value of Kenner Corporation's stock on June 30, 2018, was $15. On December 1, 2018, the board of directors declared a 2 for 1 stock split effective December 15, 2018. Jungle Corporation's stock was selling for $20 on December 1, 2018, before the stock split was declared. Par value of the stock was adjusted. Net income for 2018 was $190,000 and there were no cash dividends declared. Instructions (a) Prepare the journal entries on the appropriate dates to record the stock dividend and the stock split. (b) Fill in the amount that would appear in the stockholders' equity section for Jungle Corporation at December 31, 2018, for the following items:

The following items were shown on the balance sheet of Easton Corporation on December 31, 2018: Stockholders' equity Paid-in capital Capital stock Common stock, $10 par value, 400,000 shares authorized; ______ shares issued and ______ outstanding $1,850,000 Additional paid-in capital Instructions Complete the following statements and show your computations. (a) The number of shares of common stock issued was _______________. (b) The number of shares of common stock outstanding was ____________. (c) The common stock was issued for a total of $____________. (d) The cost per share of the treasury stock was $_______________. (e) The average issue price of the common stock was $______________. (f) Assuming that 25% of the treasury stock is sold at $20 per share, the balance in the Treasury Stock account would be $_______________.

Ralston Company is authorized to issue 10,000 shares of 8%, $100 par value preferred stock and 500,000 shares of no-par common stock with a stated value of $1 per share. If Ralston issues 9,000 shares of common stock to pay its recent attorney's bill of $37,500 for legal services on a land access dispute, which of the following would be the journal entry for Ralston to record?

Which of the following statements is not considered a disadvantage of the corporate form of organization?

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, 2018. There were no dividends declared in 2016. The board of directors declares and pays a $45,000 dividend in 2017 and in 2018. What is the amount of dividends received by the common stockholders in 2018?

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

Era Company has 3,000 shares of 6%, $100 par non-cumulative preferred stock outstanding at December 31, 2018. No dividends have been paid on this stock for 2017 or 2018. Dividends in arrears at December 31, 2018 total

Vega Corporation's December 31, 2018 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, 15,000 shares Vega's total paid-in capital was

Common Stock Dividends Distributable is reported as additional paid-in capital in the stockholders' equity section.

The accounting is essentially the same under IFRS and GAAP for

Lang, Inc. purchases 1,000 shares of its own previously issued $5 par common stock for $15,000. The treasury stock is resold by Lang, Inc. for $20,000. What effect does this transaction have on (a) net income, (b) total assets, (c) total paid-in capital, and (d) total stockholders' equity?

Retained earnings represents the amount of cash available for dividends.

Which one of the following events would not require a formal journal entry on a corporation's books?

Define par value, and discuss its significance in accounting.

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

A 10% stock dividend will increase the number of shares outstanding but the book value per share will decrease.