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Exam 11: Reporting and Analyzing Equity

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Question 101

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

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Question 102

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A corporation had the following stock outstanding when the company's board of directors declared a $55,000 cash dividend during the current year: Allocate the cash dividend between the preferred and common stockholders assuming the preferred stock is cumulative and nonparticipating and dividends are one year in arrears.

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Question 103

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If the purchase price of retired stock exceeds the net amount removed from paid-in capital, the excess is debited to Retained Earnings.

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

The price-earnings ratio reveals information about the stock market's expectations for a company's future earnings growth.

Cumulative preferred stock carries the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders.

Stated value of no-par stock is:

A company made an error in recording the 2016 purchase of computer equipment as an expense. This was discovered in 2017. The item should be reported as a prior period adjustment on the 2017 income statement.

A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share. The entry to record this transaction would be:

A company reported net income of $836,000 for the current year. The year-end market price per common share was $12 and there were 475,000 weighted-average shares of common stock outstanding. Calculate the company's price-earnings ratio.

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 cost per share of the treasury stock is:

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

Paid and declared preferred dividends are called dividends in arrears.

A large stock dividend only occurs when a distribution of more than 50% of previously outstanding shares is issued.

Stockholders' equity consists of which of the following?

Common stock always carries a preference for receiving dividends over preferred stock.

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.

A corporation's distribution of additional shares of its own stock to its stockholders without the receipt of any payment in return is called a:

Parlay Corporation has 2,000,000 shares of $0.50 par value common stock outstanding. The following selected transactions related to the company's stock took place during the current year: Prepare necessary journal entries to record the events of April 15, May 1 and May 10.

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.