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Exam 13: Accounting for Corporations

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Question 31

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A dividend preference for preferred stock means that:

A) Preferred stockholders are allocated their dividends before dividends are allocated to common shareholders.
B) Preferred shareholders are guaranteed dividends.
C) Dividends are paid quarterly.
D) Preferred stockholders prefer dividends more than common stockholders.
E) Dividends must be declared on preferred stock.

F) A) and C)
G) B) and D)

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Question 32

Multiple Choice

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Mayan Company had net income of $132,000.The weighted-average common shares outstanding were 80,000.The company sold 3,000 shares before the end of the year.There were no other stock transactions.The company's earnings per share is:

A) $1.65.
B) $1.59.
C) $44.00.
D) $26.67.
E) $1.71.

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

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Question 33

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Robin Company had net income of $67,000.The company had 9,000 weighted average common shares outstanding.The basic earnings per share equal $7.44 per share.

A company was organized in January 2014 and has 20,000 shares of $10 par value,10%,nonparticipating preferred stock outstanding and 150,000 shares of $2 par value common stock outstanding.It has declared and paid cash dividends each year as shown below.Calculate the total dividends distributed to each class of stockholder under each of the assumptions given.

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

All of the following statements regarding stock dividends are true except:

Stockholders' equity consists of which of the following?

A corporation may not legally give shares of its stock to promoters in exchange for their services in organizing the corporation.

Shareholders in a corporation have the power to bind the corporation to contracts.

On January 10,Mood Corporation purchased 15,000 shares of its own common stock at $17.50 per share.On August 4,a total of 2,000 treasury shares were sold at $19.00 per share.These are the only treasury stock transactions ever made by the corporation.Prepare the journal entries required on January 10 and August 4.

Dividend yield is defined as the annual cash dividends per share divided by the market price per share of a company's stock.

Changes in accounting estimates are accounted for in current and future periods.

Prior to May 1,Fortune Company has never had any treasury stock transactions.A company repurchased 100 shares of its common stock on May 1 for $5,000.On July 1,it reissued 50 of these shares at $52 per share.On August 1,it reissued the remaining treasury shares at $49 per share.What is the balance in the Paid-in Capital,Treasury Stock account on August 2?

_______________________ is the amount of income earned per share of a company's outstanding common stock.

The price at which a share of stock is bought or sold is known as par value.

The number of shares that a corporation's charter allows it to sell is referred to as:

Prior to June 30,a company has never had any treasury stock transactions.A company repurchased 100 shares of its $1 par common stock on June 30 for $40 per share.On July 20,it reissued 50 of these shares at $46 per share.On August 1,it reissued 20 of the shares at $38 per share.What is the journal entry necessary to record the reissuance of treasury stock on July 20?

In many states,the minimum amount that stockholders must contribute to the corporation,and which is intended to protect the creditors of the corporation,is called the:

Rhoads Corporation is authorized to issue 250,000 shares of $50 par,10%,noncumulative,nonparticipating preferred stock and 5,000,000 shares of no-par common stock.Prepare journal entries to record the following selected transactions that occurred during this year:

Shaw Corporation reported stockholders' equity on December 31 of the prior year as follows: The following selected transactions occurred during the current year: Prepare a statement of retained earnings as of December 31 of the current year.