Exam 11: Reporting and Analyzing Equity

A company is authorized to issue 750,000 shares of $5 par value common stock.Prepare journal entries to record the following selected transactions that occurred during the company's first year of operations:

Explain how both a stock split and a stock dividend affect the computation of the weighted-average number of shares outstanding.

Assume Garrison Guitar Company declared a $0.28 per share cash dividend and that the company has 25,000 shares authorized,19,000 shares issued,and 12,000 shares of common stock outstanding.The general journal entry to record the dividend declaration is:

A corporation had the following stock outstanding when the company's board of directors declared a $95,000 cash dividend during the current year: Allocate the cash dividend between the preferred and common stockholders assuming the preferred stock is cumulative and nonparticipating and dividends are one year in arrears.

The following data regarding its common stock were reported by a corporation: The number of outstanding shares is:

_________________ is a corporation's own stock that has been reacquired.

The price-earnings ratio is calculated by dividing:

A corporation had 50,000 shares of $20 par value common stock outstanding on July 1.Later that day the board of directors declared a 10% stock dividend when the market value of each share was $27.The entry to record this dividend is:

On January 1,2014,Arlington Industries repurchased 10,000 shares of its $1 par value common stock on the market when it was trading for $15 per share.On March 1,2104,Elliott reissued 5,000 shares of the treasury stock by selling it for $20 per share.On June 1,2104,Elliott reissued the remaining 5,000 shares treasury stock by selling it for $8 per share.How would the company record the June 1 transaction?

Jennings Corp.has 1,000,000 shares of $1 par value stock authorized,200,000 shares issued,and 150,000 shares outstanding.On June 1,2014,Jennings' Board of Directors declared a 10% stock dividend.At that time,the stock had market value of $30.How would the company record this transaction?

A company declared a $0.50 per share cash dividend.The company has 20,000 shares authorized,9,000 shares issued,and 8,000 shares of common stock outstanding.The journal entry to record the dividend declaration is:

A company reported earnings per share of $9.75,paid a $6.00 cash dividend per share to preferred shareholders,and paid a $0.54 cash dividend per share to common shareholders.There were 1,000 shares of preferred stock outstanding and 6,000 shares of common stock outstanding during the year and the market price per share of common stock was $45.Calculate the company's dividend yield for common stock.

A debit balance in retained earnings is often referred to as a retained earnings deficit.

How is the retirement of stock recorded?

Book value per share:

Owners of preferred stock often do not have:

No-par stock to which the directors assign a value per share is called _______________________.

What is the effect of dividend preferences on preferred stock? Explain how a dividend is distributed in the case of cumulative preferred stock with dividends in arrears.

Common stock always carries a preference for receiving dividends over preferred stock.

Explain the components of the statement retained earnings and identify the special items that are reported in it.