Exam 11: Contributed Capital

If there is no change in the number of shares authorized and issued from one year to the next,but there is a change in the number of shares outstanding on those same dates,how would you explain that change?

The following amounts were reported by Ebert Corporation on December 31,2009: Common stock- \ 5 par value \ 150,000 Additional paid-in capital 120,000 Treasury stock (8,000 shares at cost) 60,000 On January 3,2010,5,000 shares of treasury stock were sold.After the sale of the treasury shares,total stockholders' equity amounted to $277,500.No stockholders' equity transactions other than the sale of the treasury stock occurred between December 31,2009,and January 3,2010.From the information given,compute the selling price per share of the treasury stock.

Identify (by code letter)each of the following characteristics as being an advantage of (A),a disadvantage of (D),or not applicable to (N)the corporate form of business.

How should dividends in arrears be shown on a corporation's balance sheet?

On its December 31,2009,balance sheet,Houston Corporation reported its stockholders' equity as follows: Common stock- \ 5 par value, 100,000 shares authorized, 50,000 shares issued and outstanding \2 50,000 Additional paid-in capital 125,000 Retained earnings 400,000 Total stockholders' equity \7 75,000 During 2010,the following transactions occurred: Reacquired 2,500 shares at $7 per share. Sold 1,200 shares of treasury stock at $8 per share. Sold 500 shares of treasury stock at $6 per share. Net income for 2010 amounted to $80,000.No dividends were declared. Prepare the stockholders' equity section of the balance sheet as it should appear on December 31,2010.

Sylmar Corporation has 30,000 shares of $100 stated value no-par common stock authorized,and 20,000 shares were outstanding during 2009.The following transactions relate to cash dividends of Sylmar Corporation for the year ended December 31,2009.Prepare entries in journal form without explanations to record the following transactions:

When stock is issued for noncash assets or services,the dollar amount to be recorded for this exchange is determined by the

The board of directors of Irondale Corporation declared a cash dividend of $2.50 per share on 57,000 shares of common stock on June 14,2010.The dividend is to be paid on July 15,2010,to shareholders of record on July 1,2010.The proper entry to be recorded on June 14,2010,will be:

The entry to record the retirement of treasury stock will include a debit to Common Stock for the amount of the cost to retire the shares.

Retained earnings are a component of contributed capital.

Which of the following phrases is not descriptive of the corporate form of business?

Margil Industries has 40,000 shares of 9 percent cumulative preferred stock and 30,000 shares of common stock outstanding.Par value for each is $50.The company has paid no dividends for the past two years.This year,a $620,000 dividend is paid.How much of the $620,000 is paid to the common shareholders?

On January 1,2010,Belmont Corporation had 50,000 shares of $10 par value common stock issued and outstanding.All 50,000 shares had been issued in a prior period at $15 per share.On February 1,2010,Belmont purchased 2,000 shares of treasury stock for $18 per share and later sold the treasury shares for $20 per share on March 2,2010.The entry to record the purchase of the treasury shares on February 1,2010,would be:

When no-par common stock without a stated value is issued for cash,the Common Stock account is credited for an amount equal to the cash proceeds.

Which of the following could be described as both an advantage and a disadvantage of incorporation?

A corporation has 5,000 shares of 8 percent noncumulative preferred stock and 10,000 shares of common stock outstanding.Par value for each is $100.No dividends were paid last year,but this year a $93,000 dividend is paid.How much of this $93,000 goes to the holders of common stock?

A corporation has

No rights or privileges are associated with unissued stock.

Use the following information to answer the question below. The following transactions involving Lupine Corporation occurred during the year: Apr. 1 Purchased 2,000 shares of its own preferred stock for $\$ 20$ , the current market price. This is the first transaction involving its own stock engaged in by the company. May 3 Sold 400 of the shares purchased on April 1 for \$25 per share. June 5 Retired 600 of the shares purchased on April 1. The original issue price was $\$ 10$ . The par value of the stock is $\$ 5$ . The entry to record the April 1 transaction would be: