Exam 11: Reporting and Analyzing Stockholders Equity

The following data is available for BOX Corporation at December 31, 2014: Common stock, par \ 10 (authorized 30,000 shares) \2 50,000 Treasury stock (at cost \ 15 per share) \1 ,200 Based on the data, how many shares of common stock are outstanding?

Which of the following statements concerning taxation is accurate?

Freidrichs Company has issued and outstanding 11,000 shares of cumulative, 6%, €50 par value preference shares which it sold for €54 per share at the beginning of 2012. The company has never paid preference dividends. As of December 31, 2014, dividends in arrears are

Dividends in arrears on cumulative preferred stock

A disadvantage of the corporate form of business is

Mann Corporation decided to issue common stock and used the $120,000 proceeds to retire all of its outstanding bonds on January 1, 2014. The following information is available for the company for 2013 and 2014. 2014 \ 1013 Net income 20,000 \ 100,000 Average stockholders' equity 1,000,000 800,000 Total assets 1,200,000 1,200,000 Current liabilities 100,000 100,000 Total liabilities 360,000 480,000 Instructions (a) Compute the return on common stockholders' equity for both years. (b) Explain how it is possible that net income increased, but the return on common stockholders' equity decreased. (c) Compute the debt to assets ratio for both years, and comment on the implications of this change in the company's solvency.

Cash dividends are not a liability of the corporation until they are declared by the board of directors.

A corporation's own stock that has been reacquired by the corporation and held for future use is called __________________ and is deducted from total _____________________ on the balance sheet.

Racer Corporation's December 31, 2014 balance sheet showed the following: Racer's total paid-in capital was

The liability of a stockholder is usually limited to the stockholder's investment in the corporation.

The following items were shown on the balance sheet of Martin Corporation on December 31, 2014: 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 total sales price of the common stock when issued was $\$$ -___________ (d) How much did the treasury stock cost per share? $\$$ .___________ (e) What was the average issue price of the common stock? $\$$ .___________

The payout ratio is computed by dividing

Logan Corporation issues 50,000 shares of $50 par value preferred stock for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $3,000,000 and a credit or credits to

Nance Corporation's December 31, 2014 balance sheet showed the following: Nance's total paid-in capital was

Herman Corporation had net income of $120,000 and paid dividends of $24,000 to common stockholders and $20,000 to preferred stockholders in 2014. Herman Corporation's common stockholders' equity at the beginning and end of 2014 was $450,000 and $550,000, respectively. Herman Corporation's payout ratio for 2014 is

The stockholders' equity section of Piper Corporation's balance sheet at December 31, 2013, appears below: During 2014, the following stock transactions occurred: Jan. 18 Issued 80,000 shares of common stock at $23 per share. Aug. 20 Purchased 20,000 shares of Piper Corporation's common stock at $25 per share to be held in the treasury. Instructions (a) Prepare the journal entries to record the above stock transactions. (b) Prepare the stockholders' equity section of the balance sheet for Piper Corporation at December 31, 2014. Assume that net income for the year was $150,000 and that no dividends were declared.

Ritchey Corporation has the following capital stock outstanding at December 31, 2014: 9% Preferred stock, $100 par value, cumulative 12,000 shares issued and outstanding $1,200,000 Common stock, no par, $10 stated value, 500,000 shares authorized, 300,000 shares issued and outstanding 3,000,000 The preferred stock was issued at $125 per share. The common stock was issued at an average per share price of $14. Instructions Prepare the paid-in capital section of the balance sheet at December 31, 2014.

Which of the following would not be true of a privately held corporation?

Green, Inc. had 200,000 shares of common stock outstanding before a stock split occurred and 800,000 shares outstanding after the stock split. The stock split was

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