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Exam 11: Reporting and Analyzing Equity

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Question 71

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Record the following transactions of Naches Corporation in general journal form: (a)Reacquired 8,000 of its own $3 par value common stock at $20 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 $23 cash per share. (c)Sold 3,000 shares of the stock reacquired under part (a)at $19 cash per share.

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Question 72

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

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B) False

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Question 73

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A corporation is responsible for its own acts and debts because it is considered a ________.

The following data has been collected about Keller Company's stockholders' equity accounts: Assuming the treasury shares were all purchased at the same price,the number of shares of treasury stock is:

A corporation's minimum legal capital is established by recording the par or stated value of the number of shares:

Small stock dividends are recorded at par or stated value.

The main limitation in using book value per share for stock valuation models is the potential difference between recorded value and market value for both assets and liabilities.

A common statutory restriction is reported on the income statement whereas; a common contractual restriction is reported in the stockholders' equity section of the balance sheet.

Large stock dividends are recorded at par or stated value.

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.

Changes in accounting estimates are:

Dividend yield is the percent of cash dividends paid to common shareholders relative to the:

A preemptive right means shareholders can purchase their proportional share of common stock issued later by the corporation.

Global Corporation had 50,000 shares of $20 par value common stock outstanding on July 1.Later that day the board of directors declared a 10% stock dividend when the market value of each share was $27.The entry to record the dividend declaration is:

Sweet Company's outstanding stock consists of 1,000 shares of cumulative 5% preferred stock with a $100 par value and 10,000 shares of common stock with a $10 par value.During the first three years of operation,the corporation declared and paid the following total cash dividends. The amount of dividends paid to preferred and common shareholders in year 3 is:

If a corporation receives assets other than cash in exchange for stock,it records the assets received at their market value as of the date of the transaction.

Stated value stock is no-par stock that is assigned a "stated" value per share by the corporation's board of directors.

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share.The issue price was $10 per share.The entry to record this transaction would be:

Declaration of a cash dividend results in a liability being recorded.

On August 1,a company's board of directors declared a 10% stock dividend to be distributed on September 1 to the stockholders of record on August 20.The company had 1,000,000 shares of $2.50 par value common stock outstanding with a market value of $23 per share.Prepare the journal entries required on August 1,August 20,and September 1.