Exam 13: Accounting for Corporations

The following data has been collected about Keller Company's stockholders' equity accounts: Common stock \ 10 par value 20,000 shares \ 100,000 authorized and 10,000 shares issued, 9,000 shares outstanding Paid-in capital in excess of par value, common stock 50,000 Retained earnings 25,000 Treasury stock 11,500 Assuming the treasury shares were all purchased at the same price, the cost per share of the treasury stock is:

What is a stock split? How is a stock split different from a stock dividend?

Corporations may buy back their own stock for any of the following reasons except to:

Cumulative preferred stock has a right to be paid both current and prior periods' unpaid dividends before any dividend is paid to common shareholders.

A stock dividend does not reduce a corporation's assets or its stockholders' equity.

The following data were reported by a corporation: Authorized shares 20,000 Issued shares 15,000 Treasury shares 3,000 The number of outstanding shares is:

Purchasing treasury stock reduces the corporation's assets and stockholders' equity by unequal amounts.

A corporation may be authorized to issue both common and preferred stock.

The date of record is the date that directors vote to pay a cash dividend to shareholders.

A stock split is the distribution of additional shares of stock to stockholders according to their percent of ownership.

The declaration of cash dividends increases retained earnings.

The number of shares that a corporation's charter allows it to sell is referred to as:

When no-par stock is not assigned a stated value, the total amount received is recorded in the Common Stock account.

What is a corporation? Identify the key advantages and disadvantages of corporations.

A liability for dividends exists:

All stock dividends are recorded at par value so there would never be a credit to the paid-in capital in excess of par value account.

Eastline Corporation had 10,000 shares of $10 par value common stock outstanding when the board of directors declared a stock dividend of 3,000 shares. At the time of the stock dividend, the market value per share was $12. The entry to record this dividend is:

Retained earnings generally consist of a company's cumulative net income less any net losses and dividends declared since its inception.

Prior period adjustments are reported in the:

A stock dividend, declared by a corporations's directors, is a distribution of additional shares of the corporation's own stock to its stockholders without the receipt of any payment in return.