A company had the following stockholders' equity on January 1: $\begin{array}{|l|r|} \hline \begin{array}{l} \text { Common stock }-\$ 1 \text { par value; } 1,200,000 \text { shares authorized, } 400,000 \\ \text { shares issued and outstanding } \end{array} & \$ 400,000 \\ \hline \text { Contributed capital in excess of par value, common stock } & 300,000 \\ \hline \text { Retained earnings } & \$ 1,064,000 \\ \hline \text { Total stockholders' equity } & \$ 364,000 \\ \hline \end{array}$ On January 10,the company declared a 40% stock dividend to holders of record on January 25,to be distributed January 31.The market value of the stock on January 10 prior to the dividend was $20 per share.What is the book value per common share on February 1?

Total stockholders' equity does not chan

Exam 11: Reporting and Analyzing Equity

Match each of the following terms with the appropriate definitions.

Stated value stock

The earning of a higher return on common stock by paying dividends on preferred stock or interest on debt at a rate that is less than the rate of return earned with the assets from issuing preferred stock or debt

Book value per common share

No-par stock to which the directors assign a stated value per share; this amount becomes the minimum legal capital

Preferred stock

The equity of a corporation

Correct Answer:

Verified

Stated value stock

Book value per common share

Preferred stock

Premium on stock

Market value per share

Stockholders' equity

Par value

Cumulative preferred stock

Call price

Financial leverage

(Matching)

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Question 161

Match each definition with its term

The least amount that buyers of stock must contribute to the corporation or be subject to paying at a future date

Stock split

A corporation's distribution of its own stock to its stockholders without the receipt of any payment

No-par value stock

The number of shares of stock that a corporation's charter allows it to sell

Stock dividend

Correct Answer:

Verified

The least amount that buyers of stock must contribute to the corporation or be subject to paying at a future date

A corporation's distribution of its own stock to its stockholders without the receipt of any payment

The number of shares of stock that a corporation's charter allows it to sell

Preferred stock that gives the issuing corporation the right to purchase or retire it at specified future prices and dates

The costs of bringing a corporation into existence that include legal fees, promoters' fees and amounts paid to obtain a charter

The distribution of additional shares of stock to stockholders according to their present ownership

The right of common stockholders to maintain their proportionate interest in a corporation by having the first opportunity to buy additional proportionate shares of stock issued

A class of stock that has not been assigned a par value by the corporate charter

Preferred stock giving the holder the option of exchanging it for common stock at a specified rate

The basic stock of a corporation that usually carries voting rights for controlling the corporation

(Matching)

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Question 162

Prior to June 1,a company has never had any treasury stock transactions.The company repurchased 100 shares of its common stock on June 1 for $5,000.On July 1,it reissued 50 of these shares at $52 per share.On August 1,it reissued the remaining treasury shares at $49 per share.What is the balance in the Contributed Capital,Treasury Stock account on August 2?

(Multiple Choice)

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Question 163

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

(Short Answer)

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Question 164

A corporation reported net income of $3,730,000 and paid preferred cash dividends of $100,000 during the current year.There were 600,000 shares of common stock outstanding and the market price per common share was $88.33 at year-end.Calculate the company's price-earnings ratio.

(Essay)

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Question 165

_______________________________ is the total amount of cash and other assets received by the corporation from its stockholders in exchange for common stock.

(Short Answer)

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Question 166

A stock ____________________ assists with purchases and sales of shares of stock by receiving and issuing certificates as necessary.

(Short Answer)

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Question 167

A company has net income of $3,000,000.It has 600,000 weighted-average common shares outstanding and a price-earnings ratio of 17.What is the market value per share of this company's stock?

(Multiple Choice)

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Question 168

A company had the following stockholders' equity on January 1: Common stock -\ 1 par value; 1,200,000 shares authorized, 400,000 shares issued and outstanding \ 400,000 Contributed capital in excess of par value, common stock 300,000 Retained earnings \ 1,064,000 Total stockholders' equity \ 364,000 On January 10,the company declared a 40% stock dividend to holders of record on January 25,to be distributed January 31.The market value of the stock on January 10 prior to the dividend was $20 per share.What is the book value per common share on February 1?

(Essay)

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Question 169

A company has 1,000 shares of $100 par preferred stock.It also has 25,000 shares of common stock outstanding and its total stockholders' equity equals $500,000.The book value per common share is:

(Multiple Choice)

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Question 170

Explain how to compute dividend yield and discuss how it is used in analysis of a company's financial condition.

(Essay)

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Question 171

Identify and discuss the key differences between common and preferred stock.

(Essay)

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Question 172

A dividend preference for preferred stock means that:

(Multiple Choice)

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Question 173

Preferred stock that the issuing corporation at its option may retire by paying a specified amount to the preferred stockholders plus any dividends in arrears is called:

(Multiple Choice)

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Question 174

_____________ is the amount of income earned per share of a company's outstanding common stock.

(Short Answer)

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Question 175

The board of directors of a corporation:

(Multiple Choice)

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Question 176

A corporation received its charter and began business this year.The company is authorized to issue 50,000 shares of $100 par,10%,noncumulative,nonparticipating preferred stock and 500,000 shares of no-par common stock.The following selected transactions occurred during this year: Apr. 5 Issued 250 shares of preferred stock for \ 104 cash per share June 15 Exchanged 750 shares of common stock for \ 15,000 in legal Services incurred in the orgarization of the company. Prepare journal entries to record these transactions.

(Essay)

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Question 177

A company had net income of $250,000.On January 1,there were 12,000 shares of common stock outstanding.On May 1,the company issued an additional 9,000 shares of common stock.The company declared a $7,900 dividend on its noncumulative,nonparticipating preferred stock.There were no other stock transactions.The company had an earnings per share of:

(Multiple Choice)

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Question 178

An amount of assets defined by state law that stockholders must invest and leave invested in a corporation is called the:

(Multiple Choice)

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Question 179

A stock _________________ keeps stockholder records and prepares official lists of stockholders for stockholder meetings and dividend payments.

(Short Answer)

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Question 180

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

A corporation reported net income of $3,730,000 and paid preferred cash dividends of $100,000 during the current year.There were 600,000 shares of common stock outstanding and the market price per common share was $88.33 at year-end.Calculate the company's price-earnings ratio.

_______________________________ is the total amount of cash and other assets received by the corporation from its stockholders in exchange for common stock.

A stock ____________________ assists with purchases and sales of shares of stock by receiving and issuing certificates as necessary.

A company has net income of $3,000,000.It has 600,000 weighted-average common shares outstanding and a price-earnings ratio of 17.What is the market value per share of this company's stock?

A company has 1,000 shares of $100 par preferred stock.It also has 25,000 shares of common stock outstanding and its total stockholders' equity equals $500,000.The book value per common share is:

Explain how to compute dividend yield and discuss how it is used in analysis of a company's financial condition.

Identify and discuss the key differences between common and preferred stock.

A dividend preference for preferred stock means that:

Preferred stock that the issuing corporation at its option may retire by paying a specified amount to the preferred stockholders plus any dividends in arrears is called:

_____________ is the amount of income earned per share of a company's outstanding common stock.

The board of directors of a corporation:

An amount of assets defined by state law that stockholders must invest and leave invested in a corporation is called the:

A stock _________________ keeps stockholder records and prepares official lists of stockholders for stockholder meetings and dividend payments.

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

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