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

King Corporation had net income of $260,000 and paid dividends of $40,000 to common stockholders and $10,000 to preferred stockholders in 2018. King Corporation's common stockholders' equity at the beginning and end of 2018 was $870,000 and $1,130,000, respectively. There are 100,000 weighted-average shares of common stock outstanding. King Corporation's return on common stockholders' equity was

Rouse Corporation's December 31, 2018 balance sheet showed the following: 8% preferred stock, $10 par value, cumulative, 20,000 shares Rouse's total stockholders' equity was

Ramos Corporation sold 400 shares of treasury stock for $45 per share. The cost for the shares was $35. The entry to record the sale will include a

A corporation has the following account balances: Common stock, $1 par value, $60,000; Paid-in Capital in Excess of Par, $1,300,000. Based on this information, the

S. Lamar performed legal services for E. Garr. Due to a cash shortage, an agreement was reached whereby E. Garr. would pay S. Lamar a legal fee of approximately $12,000 by issuing 3,000 shares of its common stock (par $1). The stock trades on a daily basis and the market price of the stock on the day the debt was settled is $4.50 per share. Given this information, the journal entry for E. Garr. to record this transaction is:

Assume that all balance sheet amounts for Marley Company represent average balance figures. What is the return on common stockholders' equity for Marley?

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

If stock is issued for less than par value, the account

An inexperienced accountant for Douglas Corporation made the following entries. Instructions On the basis of the explanation for each entry, prepare the entry that should have been made for the transactions.

On January 1, 2018, Magnus Corporation had 60,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred: Mar. 1 Issued 35,000 shares of common stock for $550,000. June 1 Declared a cash dividend of $2.00 per share to stockholders of record on June 15. June 30 Paid the $2.00 cash dividend. Dec. 1 Purchased 5,000 shares of common stock for the treasury for $22 per share. Dec. 15 Declared a cash dividend on outstanding shares of $2.20 per share to stockholders of record on December 31. Instructions Prepare journal entries to record the above transactions.

The _______________ feature of preferred stock gives the preferred stockholders the right to receive current-year dividends and unpaid prior-year dividends before common stockholders receive any dividends.

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

Corporations generally issue stock dividends in order to

Cork Inc. declared a $160,000 cash dividend. It currently has 6,000 shares of 6%, $100 par value cumulative preferred stock outstanding. It is one year in arrears on its preferred stock. How much cash will Cork distribute to the common stockholders?

Barton Company is a publicly held corporation whose $1 par value stock is actively traded at $31 per share. The company issued 3,000 shares of stock to acquire land recently advertised at $100,000. When recording this transaction, Barton Company will

On July 6, Clayton Corporation issued 3,000 shares of its $1.50 par common stock. The market price of the stock on that date was $18 per share. Journalize the issuance of the stock.

Legal capital per share cannot be equal to the

Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections:

If stock is issued in exchange for noncash assets, the assets should be valued at the ____________________ of the consideration ___________________ or the assets ____________________, whichever is more clearly evident.

The payout ratio is computed by dividing total cash dividends declared by retained earnings.