Exam 15: Stockholders Equity

The pre-emptive right enables a stockholder to

Which dividends do not reduce stockholders' equity?

Long Co. issued 100,000 shares of $10 par common stock for $1,200,000. A year later Long acquired 12,000 shares of its own common stock at $15 per share. Three months later Long sold 6,000 of these shares at $19 per share. If the cost method is used to record treasury stock transactions, to record the sale of the 6,000 treasury shares, Long should credit

Melvern's Corporation has an investment in 15,000 shares of Wallace Company common stock with a cost of $654,000. These shares are used in a property dividend to stockholders of Melvern's. The property dividend is declared on May 25 and scheduled to be distributed on July 31 to stockholders of record on June 15. The fair value per share of Wallace stock is $63 on May 25, $66 on June 15, and $68 on July 31. The net effect of this property dividend on retained earnings is a reduction of

On June 30, 2014, when Ermler Co.'s stock was selling at $65 per share, its capital accounts were as follows: If a 100% stock dividend were declared and distributed, capital stock would be

The stockholders' equity section of Lemay Corporation shows the following on December 31, 2015: InstructionsAssuming that all of the company's retained earnings are to be paid out in dividends on 12/31/15 and that preferred dividends were last paid on 12/31/13, show how much the preferred and common stockholders should receive if the preferred stock is cumulative and fully participating.

Pember Corporation started business in 2009 by issuing 200,000 shares of $20 par common stock for $36 each. In 2014, 25,000 of these shares were purchased for $52 per share by Pember Corporation and held as treasury stock. On June 15, 2015, these 25,000 shares were exchanged for a piece of property that had an assessed value of $1,010,000. Pember's stock is actively traded and had a market price of $60 on June 15, 2015. The cost method is used to account for treasury stock. The amount of paid-in capital from treasury stock transactions resulting from the above events would be

Use the following information for questions 71 and 72. Presented below is information related to Hale Corporation: -The total paid-in capital (cash collected) related to the common stock is

The issuer of a 5% common stock dividend to common stockholders should transfer from retained earnings to paid-in capital an amount equal to the

Quirk Corporation issued a 100% stock dividend of its common stock which had a par value of $10 before and after the dividend. At what amount should retained earnings be capitalized for the additional shares issued?

Turner Corporation had the following information in its financial statements for the year ended 2014 and 2015: What is the book value per share for Turner Corporation for the year ended 2015?

Treasury stock.Agler Corporation's balance sheet reported the following: The following transactions occurred this year: (a) Purchased 200 shares of capital stock to be held as treasury stock, paying $60 per share. (b) Sold 150 of the shares of treasury stock at $65 per share. (c) Sold the remaining shares of treasury stock at $50 per share. InstructionsPrepare the journal entry for these transactions under the cost method of accounting for treasury stock.

Sealy Corporation had the following information in its financial statements for the years ended 2014 and 2015: What is the payout ratio for Sealy Corporation for the year ended 2015?

A primary source of stockholders' equity is

Indicate the principal effects of a stock dividend versus a stock split on the issuing corporation. Respond in the spaces as follows: "C" for change; "NC" for no change.

The stockholders' equity section of Gunkel Corporation as of December 31, 2014, was as follows: On March 1, 2015, the board of directors declared a 15% stock dividend, and accordingly 1,500 additional shares were issued. On March 1, 2015, the fair value of the stock was $6 per share. For the two months ended February 28, 2015, Gunkel sustained a net loss of $15,000.What amount should Gunkel report as retained earnings as of March 1, 2015?

A dividend which is a return to stockholders of a portion of their original investments is a

When a stock dividend is less than 20-25 percent of the common stock outstanding, a company is required to transfer the fair value of the stock issued from retained earnings.

Written, Inc. has outstanding 600,000 shares of $2 par common stock and 120,000 shares of no-par 8% preferred stock with a stated value of $5. The preferred stock is cumulative and nonparticipating. Dividends have been paid in every year except the past two years and the current year.Assuming that $126,000 will be distributed as a dividend in the current year, how much will the preferred stockholders receive?

Direct costs incurred to sell stock such as underwriting costs should be accounted for as 1. a reduction of additional paid-in capital.2. an expense of the period in which the stock is issued.3. an intangible asset.