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Exam 11: Corporate Reporting and Analysis

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Question 21

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Stock that has been issued and is held by stockholders is ___________________ stock.

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Question 22

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Boron Company is authorized to issue 50,000 shares of $50 par value, 8%, cumulative, fully participating preferred stock, and 750,000 shares of $5 par value common stock. Prepare journal entries to record the following selected transactions that occurred during the company's first year of operations: $\begin{array} { | l | l| } \hline \text { May 5 } & \begin{array} { l } \text { Exchanged 2,200 shares of preferred stock for a building with a market } \\\text { value of } \$ 135,000 .\end{array} \\\hline \text { July 20 } & \text { Sold } 1,550 \text { shares of preferred stock for } \$ 50 \text { cash per share. } \\\hline \text { Dec. } 20 & \text { Sold } 1,000 \text { shares of preferred stock at } \$ 52 \text { cash per share. } \\\hline\end{array}$

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Question 23

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The total number of shares outstanding is the authorized stock.

__________________________ is the annual amount of cash dividends per share distributed to common shareholders relative to the stock's market price.

Growth stocks generally pay large dividends on a regular basis.

Explain how to compute dividend yield and discuss how it is used in analysis of a company's financial condition.

On September 20, Fletcher Corporation issued 25,000 shares of no-par common stock for equipment having a market value of $85,000. Prepare the general journal entry to record this transaction.

Given the following information about a corporation's current year activities, compute the retained earnings for the current year. $\begin{array} {| l | c| } \hline \text { Retained earnings, December } 31 \text { (prior year) } & \$ 280,000 \\\hline \text { Cost of goods sold } & \$ 90,000 \\\hline \text { Other operating expenses } & \$ 54,000 \\\hline \text { Cash dividends } & \$ 31,800 \\\hline \begin{array} { l } \text { Correction of understatement of net income in prior period (inventory } \\\text { error) }\end{array} & \$ 23,000 \\\hline \text { Stock dividends } & \$ 20,000 \\\hline \text { Net income } & \$ 36,000 \\\hline\end{array}$

Companies report the cost of stock options in the:

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.

The date the directors vote to declare and pay a dividend is called the:

A company's stock is selling for $35.70 per share at year-end. This current year it paid shareholders a $1.43 per share cash dividend, reported earnings per share of $11.00, and had 750,000 common shares outstanding at year-end. Calculate the company's dividend yield.

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.

A company paid a cash dividend of $0.88 per share during the current year, and reported 18,000 shares of common stock issued, and 2,000 common shares in treasury stock during the current year. The year-end market price per share was $27.50. Calculate the following: (1) total amount of cash dividends paid to common shareholders, and (2) dividend yield.

West Company declared a $0.50 per share cash dividend. The company has 190,000 shares issued, and 10,000 shares in treasury stock. The journal entry to record the payment of the dividend is:

A liquidating dividend is:

Explain stock options and their effect on the company.

Wiggins Company has 1,000 shares of $10 par preferred stock. It also has 25,000 shares of common stock outstanding, and its total stockholders' equity equals $500,000. The book value per common share is:

Stockholders' equity consists of which of the following?

Changes in accounting estimates are: