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Exam 13: Accounting for Corporations

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Question 101

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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:

A) $15.38.
B) $16.00.
C) $19.96.
D) $20.00.
E) $100.00.

F) A) and E)
G) B) and E)

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Question 102

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A company is authorized to issue 50,000 shares of $50 par, 10%, noncumulative, nonparticipating preferred stock and 500,000 shares of no-par common stock. Prepare journal entries to record the following selected transactions that occurred during this year:

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Question 103

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A stock split increases total stockholders' equity.

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:

The price-earnings ratio is computed by dividing earnings per share by the market price per share.

The journal entry to record the declaration of dividends on common stock includes a debit to Retained Earnings and a credit to Common Dividend Payable.

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

A company declared a $0.55 per share cash dividend. The company has 200,000 shares authorized, 190,000 shares issued, and 8,000 shares in treasury stock. The journal entry to record the dividend declaration is:

A corporation sold 14,000 shares of its $10 par value common stock at a cash price of $13 per share. The entry to record this transaction would include:

Retained earnings generally consists of a company's cumulative ____________________ less any ____________________ and __________________.

Treasury stock is stock that has been authorized, issued, and is outstanding.

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

A company paid $0.48 in cash dividends per share. Its earnings per share is $4.20 and its market price per share is $30.00. Its dividend yield equals:

A class of stock that does not have a par value, and can usually be issued at any price without creating a minimum legal capital deficiency, is called:

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

Par value of a stock refers to the:

All stock dividends are recorded at par value and no paid-in capital in excess of par value is ever recorded.

On July 31, a corporation reported the following stockholders' equity: On July 31, the market value of the corporation's stock was $15 per share. The directors were considering declaring a 10% or 30% stock dividend but wanted to know what effect each stock dividend would have on stockholders' equity. Calculate the balances in the following accounts for each proposed stock dividend distribution.

How is the retirement of stock recorded?

A company made an error in recording the 2009 purchase of computer equipment as an expense. This was discovered in 2011. The item should be reported as a prior period adjustment on the 2009 income statement.