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Exam 11: Accounting for Equity

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Question 61

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The stockholders' equity section of a corporation's balance sheet follows: (1) Assuming that the preferred stock is not callable and no dividends are in arrears, compute the book values per preferred share and per common share. (2) Assuming that the preferred stock has a call price of $30 per share and there is one year of cumulative preferred dividends is in arrears, compute the book values per preferred share and per common share.

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Question 62

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A company reports the following stockholders' equity: Contributed capital: Compute the (1) number of common shares outstanding and (2) book value per common share.

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(1) Number of common shares ou...

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Question 63

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On July 31, a corporation reported the following stockholders' equity: $\begin{array}{|l|r|}\hline\begin{array}{l}\text { Common stock, } \$ 10 \text { par value, } 200,000 \text { shares authorized, } 100,000 \text { shares } \\\text { issued and outstanding }\end{array} & \$ 1,000,000 \\\hline \text { Retained earnings } & 350,000 \\\hline \text { Total stockholders' equity } & \$ 1,350,000 \\\hline\end{array}$ 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.

Prior period adjustments to financial statements can result from:

A corporation can issue both common and preferred stock.

A corporation paid a cash dividend of $0.07 per share during the current year. It had 550,000 common shares outstanding at year-end, the current year earnings per share was $3.85 and the stock's year-end market price was $17.50 per share. Calculate the company's dividend yield.

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

Shamrock Company had net income of $30,000. On January 1, there were 8,000 shares of common stock outstanding. On April 1, the company issued an additional 2,000 shares of common stock. The company declared a $2,700 dividend on its noncumulative, nonparticipating preferred stock. There were no other stock transactions. The company has an earnings per share of:

The _______________________ protects stockholders' proportional interest in a corporation by allowing them to purchase their proportional share of any common stock later issued by the corporation.

A company had a beginning balance in retained earnings of $43,000. It had net income of $6,000 and paid out cash dividends of $5,625 in the current period. The ending balance in retained earnings account is equal to:

A corporation was formed on January 1. The corporate charter authorized 100,000 shares of $10 par value common stock. During the first month of operation, the corporation issued 300 shares to its attorneys in payment of a $5,000 charge for drawing up the articles of incorporation. The entry to record this transaction would include:

Stated value of no-par stock is:

Dividend payment involves three important dates. They are ______________________, _________________________ and ____________________________.

Explain the difference between a large stock dividend and a small stock dividend. In addition, explain how to record these two types of stock dividends.

On August 31, 2013, Victory Corporation's common stock is priced at $30 per share before any stock dividend or split, and the stockholders' equity section of its balance sheet appears as follows. Assume that the company declares and immediately distributes a 100% stock dividend. $\begin{array}{lr}\text { Common stock — } \$ 7 \text { par value, } 95,000 \text { shares authorized, } 38,000 \text { shares }\\\text { issued and outstanding } & \$ 266,000 \\\text { Paid-in capital in excess of par value, common stock } & 100,000 \\\text { Retained earnings } & 366,000 \\\text { Total stockholders' equity } & \$ 732,000\end{array}$ What is the total amount in the Retained Earnings account immediately after the stock dividend?

Preferred stock that the issuing corporation at its option may retire by paying a specified amount to the preferred stockholders plus any dividends in arrears is called:

Record the following transactions of a company in general journal form: (a) Reacquired 8,000 of its own $10 par value common stock at $40 cash per share. The stock was originally issued at $15 per share. (b) Sold 2,000 shares of the stock reacquired under part (a) at $43 cash per share. (c) Sold 3,000 shares of the stock reacquired under part (a) at $39 cash per share.

_____________________ is a general term that refers to any shares issued to obtain owner financing in a corporation.

A company's board of directors votes to declare a total cash dividend of $25,000. The company has 2,500 shares of $1 par common stock and 400 shares of 4%, $200 par preferred stock outstanding. What is the total amount that will be paid to preferred shareholders?

A company's stock is selling for $67.20 per share and its earnings per share is $3.50 for the current year. Calculate the price-earnings ratio.