Exam 11: Reporting and Analyzing Equity

For each of the following independent transactions a through d,prepare the necessary journal entry: (a)Declared a $0.40 per share cash dividend on 200,000 shares of preferred stock outstanding. (b)Declared and distributed a 12% stock dividend on 800,000 shares of $5 par value common stock outstanding.Market price per common share on this date was $25. (c)Declared and distributed a 2-for-1 stock split on 500,000 shares of $10 par value common stock outstanding. (d)Declared and distributed a 30% stock dividend on 400,000 common shares of $5 par value common stock outstanding.Market price per common share on this date was $20.

A corporation began the current year with $250,000 of unappropriated retained earnings.During the current year it earned $120,000 of net (after-tax)income,declared $75,000 of cash dividends,paid $50,000 of the cash dividends and purchased treasury stock costing $40,000.Calculate the current year-end balance in retained earnings.

What are the journal entries recorded for cash dividends on the declaration date,the date of record and the payment date?

When all of the authorized shares have the same rights and characteristics,the stock is referred to as:

A company's stock is selling for $67.20 per share and its earnings per share is $3.50 for the current year.Calculate the price-earnings ratio.

______________________________________ is the stockholders' equity applicable to common shares divided by the number of common shares outstanding.

A company has 1,000 shares of $50 par value,4.5% cumulative and nonparticipating preferred stock and 10,000 shares of $10 par value common stock outstanding.The company paid total cash dividends of $1,000 in its first year of operation.The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:

Marble Corporation had the following balances in its stockholders' equity accounts at December 31,2009: Common Stock, \ 10 par, 50,000 shares authorized, 20,000 shares issued \ 200,000 Contributed Capital in Excess of Par Value, Common 250,000 Retained Earnings 500,000 Treasury Stock, 1,000 shares (20,000) Total stockholders' equity \ 930,000 The following transactions occurred during 2010: February 3 Sold and issued 3,000 shares of common stock for \ 22 per share. May 10 Declared a \ 0.50 per share dividend on common stock. October 12 Sold 500 shares of the treasury stock for \ 20 per share. December 31 Net income for the year was determined to be \ 75,000 Based on the above information,prepare a statement of stockholders' equity for 2010.Use the form below.

The total amount of cash and other assets the corporation receives from its stockholders in exchange for common stock is called __________________________.

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 company has 5,000 shares of $1 par value common stock and 6,000 shares of 2%,$98 par,non-cumulative preferred stock outstanding.The balance in Retained Earnings at the beginning of the year was $750,000.Net income for the current year was $400,000.If the company paid a dividend of $3 per share on its common stock,what is the balance in Retained Earnings at the end of the year?

_____________________ is a class of stock assigned a value by the corporation in its charter.

A stock dividend is never a ________________ on the balance sheet because it will never reduce _______________.

Preferred stock on which the right to receive dividends is forfeited for any year that the dividends are not declared is referred to as:

The annual amount of cash dividends distributed to common shareholders relative to the common stock's market value is the:

A company reported net income of $478,000 and paid $5,500 in preferred cash dividends during the current year.The company had 100,000 common shares issued and 10,000 common shares in treasury.The year-end market price per common share was $43.05.Calculate the company's price-earnings ratio.