Exam 10: Stockholders Apos Equity

A corporation has 5,000 shares of $5 par, 6% cumulative preferred stock outstanding and 25,000 shares of $2 par common stock outstanding. No dividends have been paid for the past 2 years. If the company wishes to distribute $2 per share to the common stockholders this year, what is the total amount of dividends that must be paid? a.$4,500 b.$50,000 c.$51,500 d.$54,500

An arbitrary monetary amount that has a stated value on each share of stock and establishes a minimum price for the stock when issued is the ____________________.

A corporation reported the following information at December 31, 2019: ​ A)On December 31, 2019, the board of directors issues a 3-for-1 stock split. What impact will the split have on the stock's par value? B)What journal entry is required to record the split? C)Record the declaration of a cash dividend of $1 per share on January 10, 2020. The dividend will be paid on January 31, 2020 to shareholders of record on January 24, 2020.

In July of 2020, the accountant discovered an error affecting the 2019 computation of amortization expense related to the company's patent. As a result of this error, 2019 amortization expense was understated by $21,000 and 2019 net income after taxes (which are paid at a rate of 30%) was overstated by $14,700. A)What journal entry is needed to record this prior period adjustment? B)How is this prior period adjustment reported in the financial statements?

A growing corporation had $180,000 of its $30 par common stock issued before its recent 3-for-1 stock split. The market price of the stock was $120 per share before the split. Which of the following is true as a result of the split?

When a corporation pays a previously declared cash dividend, which of the following is true?

Total stockholders' equity includes $50,000 of common stock with a stated value of $0.50, and 5,000 shares of treasury stock with a total cost of $25,000. How many total shares are outstanding?

When a corporation declares a dividend, a liability must be recorded.

____________________ shares are the maximum number of shares a corporation may issue in accordance with its corporate charter.

Match the terms to the definitions. -A common stock provision that provides for the maintenance of stockholders' ownership percentage upon the issuance of new stock.

Labor Finders, Inc. Selected data from the company's financial statements are presented below: -Refer to Labor Finders, Inc. The company's 2020 dividend payout ratio is reported as

If a new business does not have access to the major capital markets, it may depend upon venture capital for its initial equity capital.

If preferred stock is participating, then the preferred shareholders have the right to share in excess dividends above their stated dividend.

The par value of stock is reduced when stock dividends are issued.

The corporation's retained earnings is computed by adding the beginning balance and net income, then subtracting the current year ____________________.

Issued stock that is repurchased by the corporation but not retired is ____________________.

Lasik Vision, Inc. began business on June 1, 2019. The corporate charter authorized issuance of 1,000 shares of no-par common stock and 4,000 shares of $6 par, 6% cumulative preferred stock. As of the beginning of 2020, 200 shares of common stock had been issued and none of the preferred stock had been issued. If the company issues 400 shares of common stock on March 1, 2020 for $10 per share, the journal entry would include a a.$4,000 credit to paid-in capital in excess par--common stock. b.$4,000 credit to common stock. c.$2,400 credit to paid-in capital in excess of par--common stock. d.$2,400 credit to common stock.

Landmark Company This company reported the following information in the stockholders' equity section of its December 31, 2019 balance sheet: -Refer to Landmark Company. If the company repurchased 500 shares of its common stock for $20 per share, what is the amount of total stockholders' equity after this transaction?

Match the terms to the definitions. -An equity kicker whereby stockholders are granted rights to purchase shares of stock in the future.

A call provision sets forth provisions for a corporation to redeem its preferred stock at a fixed price on or after a specified date.