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

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Question 21

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Sabas Company has 40,000 shares of $100 par, 1% 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.

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Question 22

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Treasury stock should be reported in the financial statements of a corporation as a(n)

A) investment.
B) liability.
C) current asset.
D) deduction from stockholders's equity.

E) None of the above
F) A) and B)

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Question 23

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Alma Corp. issues 1,000 shares of $10 par value common stock at $16 per share. When the transaction is recorded, credits are made to:

Treasury stock which was purchased for $3,000 is sold for $3,500. As a result of these two transactions combined

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.

How is treasury stock shown on the balance sheet?

Before a stock dividend can be declared or paid, there must be sufficient cash.

Paid-in capital may originate from real estate donated to the corporation.

The date on which a cash dividend becomes a binding legal obligation is on the

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 large public corporation normally uses registrars and transfer agents to maintain records of the stockholders.

A company has 10,000 shares of $10 par common stock outstanding. Prepare entries to record the following:

A stock split results in a transfer at market value from retained earnings to paid-in capital.

The liability for a dividend is recorded on which of the following dates?

The amount of a corporation's retained earnings that has been restricted/appropriated should be reported in the notes to the financial statements.

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

On March 4, of the current year, Barefoot Bay, Inc. reacquired 5,000 shares of its common stock at $89 per share. On August 7, Barefoot Bay sold 3,500 of the reacquired shares at $100 per share. The remaining 1,500 shares were sold at $88 per share on November 29. Required:

If common stock is issued for an amount greater than par value, the excess should be credited to

Indicate whether the following actions would (+) increase, (-) decrease, or (0) not affect a company's total assets, liabilities, and stockholders' equity.

Wonder Sales is authorized to issue 100,000 shares of $100 par, 2% preferred stock and 1,000,000 shares of $10 par common stock. (a) On January 2nd, Wonder Sales issues 5,000 shares of preferred stock for $107 per share and 65,000 shares of common stock at $10 per share. Journalize this issuance. (b) On January 25th, Wonder Sales issued 250 shares of preferred stock to a Morton Law Firm for settlement of an invoice for incorporation services. The invoice was for $36,000. Journalize this issuance. (c) On January 31st, Wonder Sales issues 500 shares of common stock to Setup Inc. for fixtures. The fixtures have a fair market value of $6,500. Journalize this issuance.