Exam 12: Corporations: Organization, Stock Transactions, and Dividends

Preferred stockholders must receive their current-year dividends before the common stockholders can receive any dividends.

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends: Determine the dividends per share for preferred and common stock for the first year.

The declaration of a stock dividend decreases a corporation's stockholders' equity and increases its liabilities.

The par value of stock is an assigned per share amount defined in many states as legal capital.

Using the following accounts and balances, prepare the stockholders' equity section of the balance sheet. Fifty thousand shares of common stock are authorized, and 5,000 shares have been reacquired.

The primary purpose of a stock split is to

Financial statement data for this year and last year for Hanscombe Corp. are as follows: Earnings per share for each year were

Indicate whether the following actions would (+) increase, (-) decrease, or (0) not affect a company's total assets, liabilities, and stockholders' equity.

A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9. Subsequently, the company declared a 2% stock dividend on a date when the market price was $10 a share. The effect of the declaration and issuance of the stock dividend is to

Nevada Corporation has 30,000 shares of $25 par stock outstanding that has a current market value of $120. If the corporation issues a 5-for-1 stock split, the number of shares outstanding will be

The Sneed Corporation issues 10,000 shares of $50 par preferred stock for cash at $75 per share. Journalize the entry to record the sale.

A corporation has 10,000 shares of $100 par stock outstanding. If the corporation issues a 5-for-1 stock split, the number of shares outstanding after the split will be 40,000.

The financial loss that each stockholder in a corporation can incur is usually limited to the amount invested by the stockholder.

The declaration and issuance of a stock dividend does not affect the total amount of a corporation's assets, liabilities, or stockholders' equity.

A stock split results in a transfer at market value from retained earnings to paid-in capital.

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 60,000 shares were originally issued and 10,000 were subsequently reacquired. What is the amount of cash dividends to be paid if a $2 per share dividend is declared?

On June 5, Belen Corporation reacquired 3,300 shares of its own common stock at $45 per share. On July 15, Belen sold 2,000 of the reacquired shares at $48 per share. On August 30, Belen sold the remaining shares at $42 per share.​ Journalize the transactions of June 5, July 15, and August 30.

Match the following stockholders' equity concepts to the appropriate term (a-h).​ -The day of the event that creates a liability to company A)cash dividend B)date of record C)Stock Dividends Distributable D)date of declaration E)treasury stock F)preferred stock G)date of payment H)Paid-In Capital in Excess of Par

The ability of a corporation to obtain capital is

Which of the following statements is not true about a 2-for-1 split?