Exam 11: Corporations: Organization, Stock Transactions

BE 260 On July 6, Clayton Corporation issued 3,000 shares of its $1.50 par common stock. The market price of the stock on that date was $18 per share. Journalize the issuance of the stock.

Which of the following is not a significant date with respect to dividends?

Morgan Company reported the following balances at December 31, 2017: common stock $500,000; paid-in capital in excess of par value $100,000; retained earnings $350,000. During 2018, the following transactions affected stockholders' equity. 1. Issued preferred stock with a par value of $150,000 for $200,000. 2. Purchased treasury stock (common) for $50,000. 3. Earned net income of $140,000. 4. Declared and paid cash dividends of $75,000. Instructions Prepare the stockholders' equity section of Morgan Company's December 31, 2018, balance sheet.

Which of the following factors does not affect the initial market price of a stock?

The chief accounting officer in a corporation is the

A stock split

The par value of a stock

In the stockholders' equity section of the balance sheet, the classification of capital stock consists of

The numerator of the return on common stockholders' equity is

Under the corporate form of business organization

James Corporation has the following accounts at December 31: Common Stock, $10 par 7,000 shares issued, $70,000; Paid-in Capital in Excess of Par $10,000; Retained Earnings $55,000; and Treasury Stock, 500 shares, $10,000. Prepare the stockholders' equity section of the balance sheet.

On January 1, 2018, the stockholders' equity section of Nance Corporation shows: Common stock ($5 par value) $1,500,000; paid-in capital in excess of par value $1,000,000; and retained earnings $1,200,000. During the year, the following treasury stock transactions occurred. Mar. 1 Purchased 30,000 shares for cash at $22 per share. July 1 Sold 6,000 treasury shares for cash at $27 per share. Sept. 1 Sold 5,000 treasury shares for cash at $19 per share. Instructions (a) Journalize the treasury stock transactions. (b) Restate the entry for September 1, assuming the treasury shares were sold at $12 per share.

On January 1, Sway Corporation had 60,000 shares of $10 par value common stock outstanding. On March 17, the company declared a 15% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The stock was distributed on March 30. The entry to record the transaction of March 30 would include a

A proxy is a legal document that instructs a stockholder's agent how to vote shares of stock for the stockholder.

Which of the following is an incorrect statement about a corporation?

Parker Company has 24,000 shares of $1 par common stock issued and outstanding. The company also has 2,000 shares of $100 par 5% cumulative preferred stock outstanding. The company did not pay the preferred dividends in 2017 or 2018. What amount of dividends must the company pay the preferred shareholders in 2019 if they wish to pay the common stockholders a dividend?

On December 31, 2018, Colaw Company reports the following amounts in its stockholder' equity section: Common stock \ 2,400,000 Paid-in capital in excess of stated value-common 900,000 Retained earnings 1,980,000 Treasury stock-common 180,000 The common stock has a stated value of $10 per share. One million shares of common stock are authorized and 40,000 shares are held in the treasury. Instructions Compute the book value per share of common stock

The effect of a stock dividend is to

Each of the following decreases retained earnings except a

Township, Inc. has 10,000 shares of 5%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2017, and December 31, 2018. The board of directors declared and paid a $50,000 dividend in 2017. In 2018, $110,000 of dividends are declared and paid. What are the dividends received by the preferred and common shareholders in 2018?