Exam 11: Reporting and Analyzing Equity

Achieving an increased return on common stock by paying dividends on preferred stock at a rate that is less than the rate of return earned with the assets invested from the preferred stock issuance is called:

Cumulative preferred stock has a right to be paid prior periods' unpaid dividends after common shareholders receive an equal percentage dividend.

Treasury stock is classified as:

A company had a beginning balance in retained earnings of $430,000.It had net income of $60,000 and paid out cash dividends of $56,250 in the current period.The ending balance in retained earnings equals:

Dividend yield shows the annual amount of cash dividends distributed to common shares relative to the stock's market price.

A company issued 60 shares of $100 par value common stock for $7,000 cash.The journal entry to record the issuance is:

Sweet Company's outstanding stock consists of 1,000 shares of cumulative 5% preferred stock with a $100 par value and 5,000 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 total amount of dividends paid to preferred and common shareholders over the three-year period is:

Dynasty Corporation had stockholders' equity on January 1 as follows: Common Stock,$5 par value,1,000,000 shares authorized,400,000 shares issued; Paid-in Capital in Excess of Par Value,Common Stock,$800,000; Retained Earnings,$3,600,000.Prepare journal entries to record the following transactions:

Organization expenses of a corporation often include legal fees and promoter fees.

If a company resells treasury stock below the acquisition cost,a loss from the sale of treasury stock is recorded.

The amount of income earned per share of a company's outstanding common stock is known as:

If the dividends account is not recorded as a reduction to Retained Earnings on the date of declaration,the dividends account is closed to Retained Earnings at the end of the accounting period.

A corporation declared and issued a 15% stock dividend on October 1.The following information was available immediately prior to the dividend: The amount that paid-in capital will increase (decrease)as a result of recording this stock dividend is:

Common Stock Dividend Distributable is an equity account.

The amount of annual cash dividends distributed to common shareholders relative to the common stock's market value is the:

Stock not assigned a value per share by the corporate charter,allowing it to be issued at any price without the possibility of a minimum legal capital deficiency,is called ________.

The total number of shares outstanding is the authorized stock.

The dividend yield is computed by dividing:

Stockholders' equity consists of paid-in capital and retained earnings.

Prior period adjustments to financial statements can result from: