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Exam 11: Corporate Reporting and Analysis

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Question 41

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

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Question 42

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Earnings per share is the amount of income earned per share of a company's outstanding (weighted-average)common stock.

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Question 43

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The right of common shareholders to purchase their proportional share of any common stock later issued by the corporation is called a:

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

The following data has been collected about Keller Company's stockholders' equity accounts: $\begin{array}{ll}\text {Common stock \$ 10 par value 20,000 shares }&\$100,000\\\text {authorized and 10,000 shares issued, 9,000 shares outstanding}\\\text { Paid-in capital in excess of par value, common stock } & 50,000 \\\text { Retained earnings } & 25,000 \\\text { Treasury stock } & 11,500\end{array}$ - Assuming the treasury shares were all purchased at the same price,the cost per share of the treasury stock is:

The amount assigned per share to stock by the corporation in its charter is the ________.

Sweet Company's outstanding stock consists of 1,000 shares of cumulative 5% preferred stock with a $100 par value and 10,000 shares of common stock with a $10 par value.During the first three years of operation,the corporation declared and paid the following total cash dividends. $\begin{array} { c c r } & \text { Dividend Declared } \\\text { year 1 } & \$ 2,000 \\\text { year 2 } & \$ 6,000 \\\text { year 3 } & \$ 32,000\end{array}$ The amount of dividends paid to preferred and common shareholders in year 3 is:

________ is the annual amount of cash dividends per share distributed to common shareholders relative to the stock's market price.

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

A company has 500 shares of $50 par value preferred stock outstanding,and the call price of its preferred stock is $60 per share.It also has 20,000 shares of common stock outstanding,and the total value of its stockholders' equity is $680,000.The company's book value per common share equals:

A company made an error in recording the Year 1 purchase of computer equipment as an expense.This was discovered in Year 2.The item should be reported as a prior period adjustment on the Year 2 income statement.

The costs of bringing a corporation into existence,including legal fees,promoter fees,and amounts paid to obtain a charter are called:

Given the following information about a corporation's current year activities,compute the retained earnings for the current year. $\begin{array} { | l | r | } \hline \text { Retained earnings, December 31 (prior year) } & \$ 280,000 \\\hline \text { Cost of goods sold } & \$ 90,000 \\\hline \text { Other operating expenses } & \$ 54,000 \\\hline \text { Cash dividends } & \$ 31,800 \\\hline \text { Correction of understatement of net income in prior } & \\\hline \text { period (inventory error) } & \$ 23,000 \\\hline \text { Stock dividends } & \$ 20,000 \\\hline \text { Net income } & \$ 36,000 \\\hline\end{array}$

West Company declared a $0.50 per share cash dividend.The company has 190,000 shares issued,and 10,000 shares in treasury stock.The journal entry to record the payment of the dividend is:

Fargo Company's outstanding stock consists of 400 shares of noncumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value.During the first three years of operation,the corporation declared and paid the following total cash dividends. $\begin{array} { c c r } & \text { Dividend Declared } \\\text { year 1 } & \$ 20,000 \\\text { year 2 } & \$ 6,000 \\\text { year 3 } & \$ 32,000\end{array}$ The amount of dividends paid to preferred and common shareholders in year 1 is:

A liquidating dividend is:

Hutter Corporation declared a $0.50 per share cash dividend on its common shares.The company has 20,000 shares authorized,9,000 shares issued,and 8,000 shares of common stock outstanding. -The journal entry to record the dividend declaration is:

The price at which a share of stock is bought or sold is known as par value.

Growth stocks generally pay large dividends on a regular basis.

A proxy is a document that gives a designated agent the right to vote a shareholder's stock.