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Exam 11: Corporations: Organization, Stock Transactions

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Question 151

Multiple Choice

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The retained earnings statement

A) is the owners' equity statement for a corporation.
B) will show an addition to the beginning retained earnings balance for an understatement of net income in a prior year.
C) will not reflect net losses.
D) will, in some cases, fail to reconcile the beginning and ending retained earnings balances.

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Question 152

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Additional paid-in capital includes all of the following except

A) paid-in capital from treasury stock.
B) paid-in capital in excess of par.
C) paid-in capital in excess of stated value.
D) paid-in capital in excess of book value.

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Question 153

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Retained earnings represents the amount of cash available for dividends.

Jason Thomas has invested $200,000 in a privately held family corporation. The corporation does not do well and must declare bankruptcy. What amount does Thomas stand to lose?

Vega Corporation's December 31, 2018 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, 10,000 shares Vega's total stockholders' equity was

In its first year of operations, Arid Corporation had the following transactions pertaining to its $20 par value preferred stock. Instructions (a) Journalize the transactions. (b) Indicate the amount to be reported for (1) preferred stock, and (2) paid-in capital in excess of par - preferred stock at the end of the year.

Which one of the following is not an ownership right of a stockholder in a corporation?

The _________________ measures the percentage of earnings a company distributes in the form of cash dividends to common stockholders.

Under the cost method, Treasury Stock is debited at the price paid to reacquire the shares, and the same amount is credited to Treasury Stock when the shares are sold.

Three important dates associated with dividends are the: (1)__________________, (2)__________________, and (3)__________________.

Retained earnings restrictions are reported

In the stockholders' equity section, paid-in capital and retained earnings are reported and the specific sources of paid-in capital are identified.

A corporate board of directors does not generally

Regular dividends are declared out of

Identify (by letter) each of the following characteristics as being an advantage, a disadvantage, or not applicable to the corporate form of business organization.

A corporation is not an entity which is separate and distinct from its owners.

Under IFRS, Revaluation Surplus is part of

If preferred stock is cumulative, the

Lakeland, Inc. has 25,000 shares of 6%, $100 par value, noncumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2018. There were no dividends declared in 2017. The board of directors declares and pays a $250,000 dividend in 2018. What is the amount of dividends received by the common stockholders in 2018?

The sale of common stock below par