Exam 11: Reporting and Analyzing Equity

A corporation had the following stock outstanding when the company's board of directors declared a $95,000 cash dividend during the current year: Preferred stock, \ 100 par, 6\%,5,000 shares issued \ 500,000 Common stock, \ 10 par, 75,000 shares issued Total \ 1,250,000 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.

What is a corporation? Identify the key advantages and disadvantages of corporations.

________________________ is the number of shares that a corporation's charter allows it to sell.

A corporation issued 6,000 shares of its $10 par value common stock in exchange for land that has a market value of $84,000.The entry to record this transaction would include:

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

_____________________ preferred stock gives the issuing corporation the right to purchase or retire the stock from its holders at specified future prices and dates.

What is a stock split? How is a stock split different from a stock dividend?

During the current year,Quark Company earned $90,000 in income and paid cash dividends of $10,000 to preferred shareholders.Quark had 12,500 weighted-average shares of common stock outstanding for the year.Calculate the company's earnings per share.

Pete's outstanding stock consists of (a)17,000 shares of noncumulative 7.50% preferred stock with a $10 par value and (b)42,500 shares of common stock with a $1 par value.During its first four years of operation,the corporation declared and paid the following total cash dividends 2010 \ 0 2011 28,000 2012 100,000 2013 198,000 What is the amount of dividends that the Common Stockholders receive for all years presented?

A company issued 60 shares of $100 par value stock for $7,000 cash.The total amount of contributed capital in excess of par is:

How is the retirement of stock recorded?

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

A corporation can issue both common and preferred stock.

Holders of ______________________________ have a right to be paid both current and all prior periods' unpaid dividends before any dividend is paid to common shareholders.

Explain how to compute book value per share and discuss how it can be used to analyze the financial condition of a corporation.

Par value of a stock refers to the:

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: Jan. 10 Sold 102,000 shares of common stock for \ 8 cash per share. 15 Exchanged 10,000 shares of common stock for equipment with a market value of \ 80,000. Feb. 1 Exchanged 500 shares of common stock for \ 3,000 of legal services, Incurred during the company's organization.

A company reports the following stockholders' equity: Common stock, \ 10 par, 500,000 shares authorized \ 3,000,000 Contributed capital in excess of par, Common stock Total contributed capital \ 4,300,000 Retained earnings Total stockholders' equity \ 5,700,000 Contributed capital: Compute the (1)number of common shares outstanding and (2)book value per common share.

On September 1,a corporation had 50,000 shares of $5 par value common stock and $1,000,000 of retained earnings.On that date,when the market price of the stock is $15 per share,the corporation issues a 2-for-1 stock split.The general journal entry to record this transaction is: