Exam 11: Corporations: Organization, Stock Transactions

Identify which of the following items would be reported as additions (A) or deductions (D) in a Retained Earnings Statement. 1. Net Income 2. Net Loss 3. Cash Dividends 4. Stock Dividends

Saint, Inc. declares a 15% common stock dividend when it has 30,000 shares of $10 par value common stock outstanding. If the market value of $24 per share is used, the amounts debited to Stock Dividends and credited to Paid-in Capital in Excess of Par are:

Dividends Payable is classified as a

Retained earnings that are restricted are unavailable for dividends.

On January 1, 2018, Magnus Corporation had 60,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred: Mar. 1 Issued 35,000 shares of common stock for $550,000. June 1 Declared a cash dividend of $2.00 per share to stockholders of record on June 15. June 30 Paid the $2.00 cash dividend. Dec. 1 Purchased 5,000 shares of common stock for the treasury for $22 per share. Dec. 15 Declared a cash dividend on outstanding shares of $2.20 per share to stockholders of record on December 31. Instructions Prepare journal entries to record the above transactions.

Which of the following statements about retained earnings restrictions is incorrect?

Common Stock Dividends Distributable is reported as additional paid-in capital in the stockholders' equity section.

The paid-in capital section of the balance sheet consists of two classifications: ______________________ and ______________________.

Land Inc. has retained earnings of $800,000 and total stockholders' equity of $2,000,000. It has 300,000 shares of $5 par value common stock outstanding, which is currently selling for $30 per share. If Land declares a 10% stock dividend on its common stock:

Retained earnings are occasionally restricted

Crawl Inc., has 1,000 shares of 6%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2017, and December 31, 2018. The board of directors declared and paid a $2,000 dividend in 2017. In 2018, $10,000 of dividends are declared and paid. What are the dividends received by the common stockholders in 2018?

If a corporation's stock is traded on the major stock exchanges, the corporation must generally report periodically to a federal agency known as the ____________________.

The acquisition of treasury stock by a corporation

Ralston Company is authorized to issue 10,000 shares of 8%, $100 par value preferred stock and 500,000 shares of no-par common stock with a stated value of $1 per share. If Ralston issues 9,000 shares of common stock to pay its recent attorney's bill of $37,500 for legal services on a land access dispute, which of the following would be the journal entry for Ralston to record?

On January 1, Soft Corporation had 80,000 shares of $10 par value common stock outstanding. On June 17, the company declared a 10% stock dividend to stockholders of record on June 20. Market value of the stock was $15 on June 17. The stock was distributed on June 30. The entry to record the transaction of June 30 would include a

Barr, Inc. reports $4,000,000 of common stock, and $6,000,000 of additional paid-in capital on its balance sheet. The number of common shares issued and outstanding is 500,000 shares. The book value per share is

The concept of an "artificial being" refers to which form of business organization?

Trane Corporation has the following stockholders' equity accounts: Preferred Stock Paid-in Capital in Excess of Par-Preferred Stock Common Stock Paid-in Capital in Excess of Stated Value-Common Stock Paid-in Capital from Treasury Stock-Common Retained Earnings Treasury Stock-Common Instructions Classify each account using the following tabular alignment.

Library, Inc. has 2,500 shares of 4%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2017, and December 31, 2018. The board of directors declared and paid a $3,000 dividend in 2017. In 2018, $18,000 of dividends are declared and paid. What are the dividends received by the preferred and common shareholders in 2018?

A corporation has a separate __________________________ apart from its owners.