Exam 11: Reporting and Interpreting Stockholders Equity

The Retained Earnings balance was $22,900 on January 1.Net income for the year was $18,100.If Retained Earnings had a credit balance of $23,800 after closing entries were made for the year,and if additional stock of $5,200 was issued during the year,what was the amount of dividends declared during the year?

Corporations can raise large amounts of money because:

Mr.Big received a $5,000 payment from his sole proprietorship,Buy & Large,for work performed by Mr.Big.The payment should be recorded with a $5,000:

ROE relates:

A company issues 100,000 shares of preferred stock for $40 per share.The stock has a fixed dividend rate of 5% and a par value of $3 per share.The company records the issuance with a debit to Cash for:

A company has outstanding 9 million shares of $2 par value common stock and 1 million shares of $4 par value preferred stock.The preferred stock has an 8% dividend rate.The company declares $600,000 in total dividends for the year.Which of the following is correct if dividends in arrears are $30,000?

Ambiance Inc.buys back 3,000 shares of its $10 par value common stock from investors at $45 per share.This stock repurchase would be recorded with a debit to:

When does a corporation record an increase in Dividends Payable?

A company has the following paid-in capital: -Use the information above to answer the following question.If the company pays a $15,000 dividend and the preferred stock is noncumulative,what is the amount the common stockholders will receive?

When a company uses excess cash to buy back some of its outstanding common stock,which of the following ratios will be affected directly in the manner described below?

Houghton Company began business on January 1,2015 by issuing all of its 1,000,000 authorized shares of its $1 par value common stock for $20 per share.On June 30,Houghton declared a cash dividend of $1 per share to stockholders of record on July 31.Houghton paid the cash dividend on August 30.On November 1,Houghton reacquired 200,000 of its own shares of stock for $25 per share.On December 22,Houghton resold 100,000 of these shares for $30 per share. Required: Part a.Prepare all of the necessary journal entries to record the events described above. Part b.Prepare the stockholders' equity section of the balance sheet as of December 31,2015 assuming that the net income for the year was $3,000,000.

On February 16,a company declares a 68¢ dividend to be paid on April 5.There are 950,000 shares of common stock issued and outstanding.The entry recorded by the company on April 5 includes a debit to:

Which of the following statements about Retained Earnings is correct?

On April 30,2015,Victoria Secreto sold 1,000 shares of her Limited,Inc.'s common stock to Claire Jewels for $8,000.The stock cost Victoria $5,000.Limited,Inc.'s accounting equation:

King Corp.has one million shares outstanding with a par value of $5.On August 24 of this year,it issued a 10% stock dividend when its stock price was $25.As a result of this stock dividend,retained earnings:

A corporation had 50,000 shares of $20 par value common stock outstanding.The board of directors declared and issued a 50% stock dividend.The market value of the stock was $27 per share.What is the journal entry to record this stock dividend?

Melrose Inc.buys back 300,000 shares of its stock from investors at $6.50 a share.Two years later,it reissues this stock for $6.00 a share.The stock reissue would be recorded with a debit to Cash for:

The following data are taken from the stockholders' equity section of the balance sheet of a company: What was the average issue price per share of the common stock?

Which of the following statements accurately explains why the board of directors of a company whose financial future contains some uncertainties might issue a 2-for-1 stock split rather than declare a 100% stock dividend?

The term "capitalizing retained earnings" refers to: