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Exam 11: Corporations: Organization, Stock Transactions, and Dividends

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Question 1

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A large retained earnings account means that there is cash available to pay dividends.

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Question 2

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The retained earnings statement may be combined with the income statement.

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The issuance of common stock affects both paid-in capital and retained earnings.

When no-par stock is issued, the Common Stock account is credited for the selling price of the stock issued.

The dates of importance in connection with a cash dividend of $50,000 on a corporation's common stock are January 15, February 15, and March 15. Journalize the entries required on each date.

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends: Determine the dividends per share for preferred and common stock for each year.

A corporation has 50,000 shares of $28 par value stock outstanding that has a current market value of $150. If the corporation issues a 4-for-1 stock split, the market value of the stock will fall to approximately

A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of $150. If the corporation issues a 5-for-1 stock split, the market value of the stock after the split will be approximately:

The financial loss that each stockholder in a corporation can incur is usually limited to the amount invested by the stockholder.

Prepare entries to record the following selected transactions completed during the current fiscal year:

The day on which the board of directors of the corporation distributes a dividend is called the declaration date.

A corporation has 10,000 shares of $100 par value stock outstanding. If the corporation issues a 5-for-1 stock split, the number of shares outstanding after the split will be 40,000.

Vincent Corporation has 100,000 share of $100 par common stock outstanding. On June 30, Vincent Corporation declared a 5% stock dividend to be issued on July 30 to stockholders of record July 15. The market price of the stock was $132 a share on June 30. Journalize the entries required on June 30, July 15 and July 30.

Treasury stock that had been purchased for $5,600 last month was reissued this month for $8,500. The journal entry to record the reissuance would include a credit to

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

A restriction/appropriation of retained earnings

Retained earnings

Using the following accounts and balances, prepare the Stockholders' Equity section of the balance sheet. Fifty thousand shares of common stock are authorized, and 5,000 shares have been reacquired.

Which of the following amounts should be disclosed in the stockholders' equity section of the balance sheet?

The Sneed Corporation issues 10,000 shares of $50 par value preferred stock for cash at $75 per share. The entry to record the transaction will consist of a debit to Cash for $750,000 and a credit or credits to