Exam 13: Accounting for Corporations

A corporation was formed on January 1.The corporate charter authorized 100,000 shares of $10 par value common stock.During the first month of operation,the corporation issued 300 shares to its attorneys in payment of a $5,000 charge for drawing up the articles of incorporation.The entry to record this transaction would include:

A corporation sometimes gives shares of its stock to promoters in exchange for their services in organizing the corporation.

A company has earnings per share net income of $900,000; its weighted-average common shares outstanding are 180,000.Its dividend per share is $0.45,its market price per share is $88,and its book value per share is $76.Its price-earnings ratio equals:

Dividend yield is defined as the market price per share of a company's stock divided by its earnings per share.

A corporation received its charter and began business this year.The company is authorized to issue 50,000 shares of $100 par,10%,noncumulative,nonparticipating preferred stock,and 500,000 shares of no-par common stock.The following selected transactions occurred during this year: Prepare journal entries to record these transactions.

Authorized stock is the total number of shares outstanding.

The stockholders' equity section of a company's year-end balance sheet follows: The preferred stock has a call price of $103 per share plus dividends in arrears.Only one year of dividends is in arrears.Calculate the book value per (1)preferred share,and (2)common share.

Dividend yield shows the annual amount of cash dividends distributed to common shares relative to the stock's market price.

A company has earnings per share of $6.45.Its dividend per share is $0.20,and its market price per share is $80.Its price-earnings ratio equals 12.4.

A corporation had stockholders' equity on January 1 as follows: Common Stock,$10 par value,1,500,000 shares authorized,600,000 shares issued; Paid-in Capital in Excess of Par Value,Common Stock,$1,000,000; Retained Earnings,$2,500,000.Prepare journal entries to record the following transactions:

A liquidating dividend is:

A corporation is responsible for its own acts and debts.This is because a corporation is considered a ____________________________________.

A company has 1,000 shares of $100 par preferred stock.It also has 25,000 shares of common stock outstanding,and its total stockholders' equity equals $500,000.The book value per common share is:

_____________ is the amount of income earned per share of a company's outstanding common stock.

The following data were reported by a corporation: The number of outstanding shares is:

The journal entry to record the declaration of dividends on common stock includes a debit to Retained Earnings and a credit to Common Dividend Payable.

Book value per share reflects the value per share if a company is liquidated at balance sheet amounts.

Paid-in capital is the total amount of cash and other assets the corporation receives from its stockholders in exchange for its stock.

All of the following statements regarding stock dividends are true except:

A company paid $0.75 in cash dividends per share.Its earnings per share is $3.50,and its market price per share is $37.50.Its dividend yield equals: