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

The stockholders' equity section of Barrel Corporation's balance sheet at December 31, 2017, appears below: During 2018, the following stock transactions occurred: Jan. 18 Issued 50,000 shares of common stock at $32 per share. Aug. 20 Purchased 25,000 shares of Barrel Corporation's common stock at $24 per share to be held in the treasury. Nov. 5 Reissued 9,000 shares of treasury stock for $28 per share. Instructions (a) Prepare the journal entries to record the above stock transactions. (b) Prepare the stockholders' equity section of the balance sheet for Barrel Corporation at December 31, 2018. Assume that net income for the year was $150,000 and that no dividends were declared.

Both a stock split and a stock dividend will _________________ the number of shares outstanding and have _________________ on total stockholders' equity.

A corporation commits to a legal obligation when it declares

Restricting retained earnings for the cost of treasury stock purchased is a

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

Treasury stock purchased for $25 per share that is reissued at $20 per share, results in a Loss on Sale of Treasury Stock being recognized on the income statement.

The following information is available for Zip Corporation: The company accountant, in preparing financial statements for the year ending December 31, 2018, has discovered the following information: The company's previous bookkeeper, who has been fired, had recorded depreciation expense on equipment in 2016 and 2017 using the double-declining-balance method of depreciation. The bookkeeper neglected to use the straight-line method of depreciation which is the company's policy. The cumulative effects of the error on prior years was $35,000, ignoring income taxes. Depreciation was computed by the straight-line method in 2018. Instructions (a) Prepare the entry for the prior period adjustment. (b) Prepare the retained earnings statement for 2018.

The dominant form of business organization in the United States in terms of dollar sales volume, earnings, and employees is

A stockholder has the right to vote in the election of the board of directors.

Treasury stock is a contra stockholders' equity account.

If Keene Company issues 9,000 shares of $5 par value common stock for $160,000, the account

Many companies prepare a stockholders' equity statement instead of presenting a detailed stockholders' equity section in the balance sheet.

Under IFRS, the term reserves relates to each of the following except

The ability of a corporation to obtain capital is

Regular dividends are declared out of

In published annual reports

Last Inc., has 2,000 shares of 6%, $50 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2018, and December 31, 2017. The board of directors declared and paid a $4,000 dividend in 2017. In 2018, $24,000 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2018?

Stockholders of a corporation directly elect

The number of common shares outstanding can never be greater than the number of shares issued.

Kong Inc. reported net income of $298,000 during 2018 and paid dividends of $26,000 on common stock. It also has 10,000 shares of 6%, $100 par value cumulative preferred stock outstanding. Common stockholders' equity was $1,200,000 on January 1, 2018, and $1,600,000 on December 31, 2018. The company's return on common stockholders' equity for 2018 is: