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Exam 11: Reporting and Analyzing Equity

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Question 31

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A corporation may be authorized to issue both common and preferred stock.

A) True
B) False

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Question 32

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What is treasury stock? What reasons might a company hold treasury stock?

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Treasury stock is the company's own issu...

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Question 33

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Stock that has been issued and is held by stockholders is ________ stock.

The Discount on Common Stock account reflects:

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

A liability for dividends exists:

A company's board of directors votes to declare a cash dividend of $.75 per share of common stock.The company has 15,000 shares authorized,10,000 issued,and 9,500 shares outstanding.The total amount of the cash dividend is:

Cumulative preferred stock carries the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders.

A liability for a dividend does not exist until the directors declare a dividend.

Mayan Company had net income of $132,000.The weighted-average common shares outstanding were 80,000.The company declared a $27,000 dividend on its noncumulative,nonparticipating preferred stock.There were no other stock transactions.The company's earnings per share is:

Prior to September 30,a company has never had any treasury stock transactions.A company repurchased 1,000 shares of its $2 par common stock on September 30 for $20 per share.On October 2,it reissued 400 of these shares at $21 per share.On October 12,it reissued the remaining 600 shares at $19 per share.The journal entry to record the reissuance of the shares on October 2 would be:

Prior to June 30,a company has never had any treasury stock transactions.A company repurchased 100 shares of its common stock on June 30 for $40 per share.On July 20,it reissued 50 of these shares at $46 per share.On August 1,it reissued 20 of the shares at $38 per share.What is the balance in the Treasury Stock account on August 2?

Common Stock Dividend Distributable is a liability account.

Cash dividends decreases stockholders' equity at the time the dividends are paid.

A corporation paid a cash dividend of $0.85 per share during the current year.It had 1,550,000 common shares outstanding at year-end,its current year earnings per share was $3.45,and the stock's year-end market price was $10.63 per share.Calculate the company's dividend yield.

If a corporation is authorized to issue 1,000 shares of $5 common stock,it is said to have $5,000 of stock outstanding.

Cactus Joe Corporation reported stockholders' equity on January 1 of the current year as follows: Common Stock,$5 par value,1,000,000 shares authorized,600,000 shares issued; Paid-in Capital in Excess of Par Value,Common Stock,$1,025,000; Retained Earnings,$1,850,000.Prepare journal entries to record the following transactions:

Wiggins Company has 1,000 shares of $10 par preferred stock,which were issued at par.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:

Retained earnings generally consist of a company's cumulative net income less any net losses and dividends declared since its inception.

A company reported the following stockholders' equity on January 1 of the current year: Prepare journal entries for the following selected transactions related to this company's stock during the current year: