Exam 10: Stockholders Apos Equity

The ____________________ date is the date on which a corporation announces that it will pay a dividend.

Both stock dividends and stock splits increase the number of a corporation's outstanding shares without altering the proportionate ownership of the corporation.

The ____________________ right provides that common stockholders may keep the same percentage of ownership if new stock is issued.

Lanthier's Heating & Air This company began business on June 1, 2019. The articles of incorporation authorize issuance of 10,000 shares of $2 par common stock and 5,000 shares of $8 par 6% cumulative preferred stock. -Refer to Lanthier's Heating & Air. On June 5, 2019, the company issued 2,400 shares of common stock for $20 per share. What effect does the entry to record the stock issuance have on total stockholders' equity? a.increase of $4,800 b.decrease of $4,800 c.increase of $48,000 d.decrease of $48,000

Since stock dividends are paid with shares of stock instead of cash, no reduction in Retained Earnings is recorded.

The following information pertains to Leapfrog Academy at December 31, 2019: Prepare the stockholders' equity section of the balance sheet at December 31, 2019.

The ____________________ ratio is computed by dividing common stock dividends by net income.

When computing the dividend yield, net income is divided by the common stock price.

Cumulative and participating dividend features are typically associated with preferred stock.

A corporation reported the following information at December 31: ​ A)How many shares of preferred stock are issued? B)How many shares of common stock are issued? C)How many shares of preferred stock are outstanding? D)How many shares of common stock are outstanding? E)How many of the preferred shares will receive dividends if they are paid? F)How many of the common shares will receive dividends if they are paid? G)What is the stated dividend per share on the preferred stock? H)What is the total amount of dividends to be paid to preferred stockholders this year? I)If all of the preferred stock was issued at the same price, what was the issue price per share? J)If all of the common stock were issued at the same price, what was the issue price per share?

An electric utility issued 3,000 shares of common stock, all of the same class; 2,800 shares are outstanding and 200 are held in the treasury. On August 15, the board of directors declared a cash dividend of $2.10 per share, payable on September 15, to stockholders of record on August 31. ​ Prepare the required journal entries for August 15, August 31, and September 15.

What types of accounts are Treasury Stock and Paid-in Capital from Treasury Stock Transactions?

Lake Lanier Grill The stockholders' equity section of the December 31, 2019, balance sheet is provided below: Assume that all 2,000 shares of stock were issued as of December 31, 2019 for $3.50 per share. On March 1, 2020, the company reacquired 1,000 shares of its common stock for $4.50 per share. -Refer to Lake Lanier Grill, Inc. The journal entry to record the transaction on March 1 includes a credit to what account and for what amount?

LaFarge North America The following information relates to this company's stockholders' equity accounts: -Refer to LaFarge North America. What is the amount of retained earnings?

If preferred stock is convertible, then the preferred shareholders have the option to trade voting privileges for the dividend payment preference.

All treasury stock is outstanding.

"You Decide" Essay You are the Chief Financial Officer of Laser Craft Technology. Your company needs to raise capital to pursue an expansion project, but the company does not want to sell additional common stock. What factors should you consider in deciding whether to issue debt or preferred stock?

A stock split has the effect of reducing the par value per share and the number of shares outstanding.

All of the following are reasons that a corporation may purchase treasury stock except

The equity section of a balance sheet at December 31, 2019, is presented below: On May 15, 2020, the company reacquired 1,000 shares of its common stock at $15 per share. Then on July 1, 2020, 500 shares of treasury stock were sold for $20 per share. A)What journal entries will be required to record the May 15 and July 1 transactions? B)How many shares of the company's stock are outstanding on July 1, 2020, immediately following the sale of the treasury stock?