Exam 11: Contributed Capital

Use the following information to answer the question below. On January 1,2009,Falcon Corporation had 40,000 shares of $10 par value common stock issued and outstanding.All 40,000 shares had been issued in a prior period at $17 per share.On February 1,2009,Falcon purchased 1,000 shares of treasury stock for $19 per share and later sold the treasury shares for $26 per share on March 2,2009. The entry to record the sale of the treasury shares on March 2,2009 is:

Dividends in arrears pertain to noncumulative preferred stock.

Beckham Corporation has 3,000 shares of $100 par value,7 percent cumulative preferred stock,and 10,000 shares of $10 par value common stock outstanding during its first five years of operation.Beckham Corporation paid cash dividends as follows: 2006,$16,500; 2007,$0; 2008,$65,000; 2009,$30,000; 2010,$15,000.The amount of dividends the common stockholders received during 2006 was

Convertible preferred stock is preferred stock that may be exchanged for

The entry to record the purchase of treasury stock will cause total stockholders' equity to decrease by the amount of the cost of the treasury shares.

Prepare in proper form the stockholders' equity section of the balance sheet from the following selected accounts and balances taken from the adjusted trial balance of Keller Corporation as of December 31,20xx. Partial Adiusted Trial Balance Account Common Stock- \ 10 par value, 100,000 shares authorized, 55,000 shares issued and outstanding Preferred Stock- \ 100 par value, 9 percent cumulative, 20,000 shares authorized, 4,000 shares issued and outstanding Additional Paid-in Capital, Preferred Additional Paid-in Capital, Common Retained Earnings Debit Credit 550,00 400,000 15,000 400,000 90,000

The limited liability of a stockholder can be viewed as both an advantage and a disadvantage.

The par value of stock constitutes the legal capital of a corporation.

The dividends yield is measured in terms of "times."

Start-up and organization costs

Mercer Corporation has 200,000 shares of $10 stated value no-par common stock authorized,and 160,000 shares were outstanding during 2009.The following transactions relate to cash dividends of Mercer Corporation for the year ended December 31,2009.Prepare entries in journal form without explanations to record the following transactions: June 1 Declared a semiannual cash dividend of \ 0.50 per common share. July 15 Compiled the list of individual shareholders eligible for the dividend declared on June 1. Dec. 1 Declared a semiannual cash dividend of \ 0.50 per common share to be paid on January 5, 2010. Compiled the list of individual shareholders eligible for the dividend declared 31 Closed the Dividends account at year end.

Dividends yield equals

The sale of shares in a corporation by one stockholder to another affects the total capital of the corporation.

Brandt Corporation is authorized to issue 100,000 shares of $5 stated value common stock and 2,000 shares of $100 par value,8 percent preferred stock.Prepare entries in journal form without explanations to record the following transactions: Apr. 15 Issued 1,000 shares of common stock to an attorney for a bill of \ 9,000 in connection with the organization of the corporation. 25 Issued 1,000 shares of preferred stock for cash of \ 115 per share. 27 Issued 8,000 shares of common stock in exchange for land for a plant site valued at \ 50,000 . May 1 Issued 15,000 shares of common stock for \ 90,000 in cash.

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 effects of the entry to record the payment of the dividend on July 15,2010,are to

Prepare in proper form the stockholders' equity section of the balance sheet from the following selected accounts and balances taken from the adjusted trial balance of Waller Corporation as of December 31,20xx. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Partial Adjusted Trial Balance }$ Account Debit Credit Common Stock- \ 10 par value, 90,000 shares authorized, 40,000 shares issued and outstanding 400,000 Preferred Stock- \ 100 par value, 7 percent cumulative, 50,000 shares authorized, 8,000 shares issued and outstanding 800,000 Additional Paid-in Capital, Preferred 30,000 Additional Paid-in Capital, Common 200,000 Retained Earnings 100,000

Treasury stock is reported as an asset on the balance sheet because treasury shares may be sold later.

Define outstanding stock.

The following information relates to the number of common shares of the Nelly Corporation: $40,000 \text { Authorized shares }\quad 15,000 \text { Unissued shares } \quad2,500 \text { Treasury shares }$ Calculate the number of outstanding shares from the information given.Show your calculations.

The maximum number of shares of common stock that may be issued according to the corporation's charter is referred to as