Exam 11: Reporting and Analyzing Stockholders Equity

Treasury stock should be reported in the financial statements of a corporation as a(n)

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

The corporate charter of Torres Corporation allows the issuance of a maximum of 4,000,000 shares of $1 par value common stock. During its first three years of operation, Torres issued 2,080,000 shares at $15 per share. It later acquired 80,000 of these shares as treasury stock for $25 per share. Instructions Based on the above information, answer the following questions: (a) How many shares were authorized? (b) How many shares were issued? (c) How many shares are outstanding? (d) What is the balance of the Common Stock account? (e) What is the balance of the Treasury Stock account?

The per share amount normally assigned by the board of directors to a large stock dividend is

Which one of the following would not be considered an advantage of the corporate form of organization?

Oxford Inc. was authorized to issue 100,000 £10 par value ordinary shares. As of December 31, 2014, the company had issued 44,000 shares at an average price of £22 per share. During 2014, the company felt that the shares were undervalued so it purchased 10,000 treasury shares at £18 per share. When the share price rebounded later in the year, the company sold 4,000 of the treasury for £25. Retained earnings was £1,658,000 at December 31, 2014. Total equity at December 31, 2014 is

Holden Packaging Corporation began business in 2014 by issuing 80,000 shares of $5 par common stock for $8 per share and 20,000 shares of 6%, $10 par preferred stock for par. At year end, the common stock had a market value of $10. On its December 31, 2014 balance sheet, Holden Packaging would report

Preferred stock has contractual preference over common stock in certain areas.

The per share amount normally assigned by the board of directors to a small stock dividend is

Those most responsible for the major policy decisions of a corporation are the

A large stock dividend and stock split can frequently have the same effect on the market price of a corporation's stock. Explain how stock dividends and stock splits affect the market price of a corporation's stock.

Restricted retained earnings are available for preferred stock dividends but unavailable for common stock dividends.

Stockholders generally have the right to share in corporate _______________ and in ______________ upon liquidation.

All of the following are normally found in a corporation's stockholders' equity section except

On January 1, Ripken Corporation had 40,000 shares of $10 par value common stock outstanding. On March 17 the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The stock was distributed on March 30. The entry to record the transaction of March 30 would include a

Of the four dividends types, the two most common types in practice are

The date on which a cash dividend becomes a binding legal obligation is on the

Ace Inc. has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2014. What is the annual dividend on the preferred stock?

The following information pertains to Marsh Company. Assume that all balance sheet amounts represent average balance figures. Total asset \ 400,000 Stockholders' equity-common 200,000 Total stockholders' equity 280,000 Sales 120,000 Net income 24,000 Number of shares of common stock 8,000 Common dividends 9,000 Preferred dividends 6,000 What is Marsh's return on common stockholders' equity?

When retained earnings are restricted, total retained earnings