Exam 10: Reporting and Analyzing Stockholders Equity

Tomlinson Packaging Corporation began business in 2017 by issuing 50,000 shares of $5 par common stock for $8 per share and 5,000 shares of 6%, $10 par preferred stock for par. At year end, the common stock had a market value of $10. On its December 31, 2017 balance sheet, Tomlinson Packaging would report

The following information pertains to Marsh Company. Assume that all balance sheet amounts represent average balance figures. Total asset \ 400,000 Stockholders' equity-common 200,000 Total stockholders' equity 280,000 Sales 120,000 Net income 30,000 Number of shares of common stock 8,000 Common dividends 6,000 Preferred dividends 4,000 What is Marsh's return on common stockholders' equity?

Preferred stock has contractual preference over common stock in certain areas.

Which of the following is the appropriate general journal entry to record the declaration of cash dividends?

YZ Company has $20,000 of dividends in arrears. Based on this information, which of the following statements is false?

Denson, Inc. has 10,000 shares of 5%, $100 par value, non-cumulative preferred stock and 40,000 shares of $1 par value common stock outstanding at December 31, 2017. There were no dividends declared in 2016. The board of directors declares and pays a $120,000 dividend in 2017. What is the amount of dividends received by the common stockholders in 2017?

When preferred stock is cumulative, preferred dividends not declared in a given period are called dividends in arrears.

Kaplan Manufacturing Corporation purchased 2,500 shares of its own previously issued $10 par common stock for $62,500. As a result of this event,

The following information pertains to Benedict Company. Assume that all balance sheet amounts represent average balance figures. Total assets \ 300,000 Stockholders' equity-common 150,000 Total stockholders' equity 200,000 Sales revenue 100,000 Net income 25,000 Number of shares of common stock 6,000 Common dividends 5,000 Preferred dividends 7,000 What is the return on common stockholders' equity ratio for Benedict?

Cerner Corporation began business by issuing 300,000 shares of $5 par value common stock for $24 per share. During its first year, the corporation sustained a net loss of $50,000. The year-end balance sheet would show

When no-par common stock with a stated value is issued for cash, the common stock account is credited for an amount equal to the cash proceeds.

The acquisition of treasury stock by a corporation

Oxford Inc. was authorized to issue 100,000 £10 par value ordinary shares. As of December 31, 2017, the company had issued 44,000 shares at an average price of £22 per share. During 2017, the company felt that the shares were undervalued so it purchased 10,000 treasury shares at £18 per share. When the share price rebounded later in the year, the company sold 4,000 of the treasury shares for £25 per share. Retained earnings was £1,658,000 at December 31, 2017. Total equity at December 31, 2017 is

If a stockholder cannot attend a stockholders' meeting, he may delegate his voting rights by means of a(n)

Green, Inc. had 200,000 shares of common stock outstanding before a stock split occurred and 600,000 shares outstanding after the stock split. The stock split was

The Common Stock Distributable account is classified as a current liability.

A stock dividend is a pro rata distribution of cash to a corporation's stockholders.

A stock dividend does not affect the total amount of stockholders' equity.

Ferman Corporation had net income of $140,000 and paid dividends of $40,000 to common stockholders and $20,000 to preferred stockholders in 2017. Ferman Corporation's common stockholders' equity at the beginning and end of 2017 was $870,000 and $1,130,000, respectively. Ferman Corporation's payout ratio for 2017 was

A corporation acts under its own name rather than in the name of its stockholders.