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

The market value of a corporation's stock is determined by the number of shares that the corporation has been authorized to issue.

A numerator of the payout ratio is

If stock is issued for a noncash asset, the asset should be recorded on the books of the corporation at

If a stockholder cannot attend a stockholder's meeting, he may delegate his voting rights by means of

Retained earnings is affected by each of the following except

Why must a corporation have sufficient retained earnings before it may declare cash dividends?

On January 1, 2018, Dreamy Company issued 30,000 shares of $2 par value common stock for $150,000. On March 1, 2018, the company purchased 6,000 shares of its common stock for $7 per share for the treasury. On June 1, 2018, 1,500 of the treasury shares are sold for $10 per share. On September 1, 2018, 3,000 treasury shares are sold at $5 per share. Instructions Journalize the stock transactions of Dreamy Company in 2018.

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

Other comprehensive income items include each of the following except

Par value of stock represents the __________________ per share that must be retained in the business for the protection of corporate ___________________.

The cumulative effect of the declaration and payment of a cash dividend on a company's balance sheet is to

eris, Inc. has 1,000 shares of 6%, $10 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2018. What is the annual dividend on the preferred stock?

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

Domaine Corporation is authorized to issue 1,000,000 shares of $1 par value common stock. During 2018, the company has the following stock transactions. Jan. 15 Issued 500,000 shares of stock at $7 per share. Sept. 5 Purchased 30,000 shares of common stock for the treasury at $9 per share. Instructions Journalize the transactions for Domaine Corporation.

Dividends Payable is classified as a

Crawl Inc., has 1,000 shares of 6%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2017, and December 31, 2018. The board of directors declared and paid a $2,000 dividend in 2017. In 2018, $10,000 of dividends are declared and paid. What are the dividends received by the common stockholders in 2018?

The ultimate effect of incurring an expense is to reduce stockholders' equity. The declaration of a cash dividend also reduces stockholders' equity. Explain the difference between an expense and a cash dividend and explain why they have the same effect on stockholders' equity.

Sandoz Corporation was organized on January 1, 2018, with authorized capital of 500,000 shares of $10 par value common stock. During 2018, Sandoz issued 30,000 shares at $12 per share, purchased 3,000 shares of treasury stock at $13 per share, and sold 3,000 shares of treasury stock at $14 per share. What is the amount of additional paid-in capital at December 31, 2018?

The following stockholders' equity accounts, arranged alphabetically, are in the ledger of Star Corporation at December 31, 2018. Instructions Prepare the stockholders' equity section of the balance sheet at December 31, 2018.

The date a cash dividend becomes a binding legal obligation to a corporation is the