Exam 11: Stockholders Equity

Nova,Inc.is considering declaring a $100,000 cash dividend.Nova has a cash balance of $20,000 and Retained Earnings balance of $100,000.Nova should:

Dividends in arrears are reported as current liabilities on the balance sheet.

Yamhill,Inc.began on January 1,2016 by issuing 200,000 shares of $1 par value common stock and 2,000 shares of $100 par value,5%,cumulative preferred stock.No dividends were declared in 2016 or 2017.In 2018,Yamhill declared and paid the preferred stockholders and a $0.50 dividend to its common stockholders.Assuming all shares originally issued are outstanding,the total dividend declared and paid in 2018 equals:

Match each term with the appropriate definition.Not all definitions will be used. -Market Value

If a corporation declares and distributes a stock dividend on its common shares:

Which of the following statements about stock dividends is correct?

The number of shares issued represents the number of shares:

When a company reissues (or sells)shares of its treasury stock at an amount different than its cost,it reports a gain or a loss on the sale.

Holders of common stock receive certain benefits,such as a residual claim,which is the:

Advantages of equity financing over debt financing include that:

In an IPO on May 1,2012,Timmy Hilfigure purchased 1,000 shares of Abner Crummie,Inc.for $5,000.On April 30,2018,Timmy Hilfigure sold the 1,000 shares for $8,000 to Ralph Loring.What is the effect of the sale on April 30,2018?

Match each term with the appropriate definition.Not all definitions will be used. -LLC

Which of the following organizations is required by law to apply for a charter?

On February 16,Hawthorne Co.declares a $1.36 dividend to be paid on April 5.There are 1,900,000 shares of common stock issued and outstanding.The entry recorded by the company on April 5 includes a debit to:

Gladstone Company issues 200,000 shares of preferred stock for $40 a share.The stock has fixed annual dividend rate of 5% and a par value of $3 per share.If sufficient dividends are declared,preferred stockholders can anticipate receiving dividends of:

A corporation had 50,000 shares of $20 par value common stock outstanding.The board of directors declared and issued a 50% stock dividend.The market value of the stock was $27 per share.What is the journal entry to record this stock dividend?

Which of the following statements about dividends is correct?

At the end of the accounting period,but before the closing entries have been recorded,Doug,the proprietor of Pepper's Cafe,has a debit of $12,250 in his drawing account and a credit of $63,400 in his capital account.If his capital account has a credit balance of $68,950 after the closing,what was his net income?

Cholla Co.issued 20,000 shares of no-par value common stock at $10 per share.Mr.Ivanhoe,the bookkeeper,recorded the transaction with a $200,000 debit to Cash and $200,000 credit to Common Stock.Which of the following statements about this situation is correct?

Before dividends can be paid to common stockholders,if the preferred stock is ________,any ________ must be paid to the preferred stockholders.