Exam 10: Corporations: Paid-In Capital and Retained Earnings

Evergreen Building,Inc.has declared a $40,000 cash dividend to shareholders.The company has 5,000 shares of $20-par,6% preferred stock and 10,000 shares of $15-par common stock.The preferred stock is cumulative.How much will be distributed to the preferred and common stockholders on the date of payment if the preferred stock is $12,000 in arrears?

The portion of Stockholders' Equity that can be used for dividends is referred to as legal capital.

If a company resells treasury stock for less than it was acquired,how is the difference between the original purchase price and the resell price recorded? First,you would:

Mike's Motors has 200,000 shares of $5-par common stock outstanding.They have declared a 10% stock dividend.The current market price of the common stock is $11/share.The amount that will be credited to Common Stock on the date of declaration is:

Which of the following is NOT an advantage of a corporation?

What are dividends in arrears?

If a company has 18,000 shares outstanding before a 3-for-1 stock split,then after the split they will have 6,000 shares outstanding.

Sonny's Sails has declared a $40,000 cash dividend to shareholders.The company has 5,000 shares of $20-par,6% preferred stock and 10,000 shares of $15-par common stock.The preferred stock is non-cumulative.How much will be distributed to the preferred and common stockholders on the date of payment?

Retained Earnings represent internally generated capital.

A stock dividend affects total Stockholders' Equity.

A stockholder may have three basic rights.

Elite Electrical has 350,000 shares of $3-par common stock outstanding.They have declared a 5% stock dividend.The current market price of the common stock is $7.50/share.The amount that will be credited to common stock on the date of declaration is:

Stockholders' Equity consists of contributed capital and paid-in capital.

Treasury stock is a contra-equity account and carries a debit balance.

Which of the following dates do NOT require a journal entry?

A corporation may issue stock for assets other than cash,requiring the recording of the assets at fair market value.

On the date of record:

Ironworks,Inc.has declared a $20,000 cash dividend to shareholders.The company has 5,000 shares of $15-par,10% preferred stock and 10,000 shares of $20-par common stock.The preferred stock is non-cumulative.How much will be distributed to the preferred and common stockholders on the date of payment?

Many companies raise capital by issuing stock directly to stockholders or by using an underwriter.

Outstanding stock of a corporation represents 100% of its ownership.