Exam 10: Stockholders Equity

Private corporations typically issue their stock to management and employees rather than the general public.

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

The preemptive right entitles a common stockholder to a proportionate share of any dividend payouts.

Appropriations of retained earnings must be reported

Capitalization of retained earnings occurs when a corporation's stock is split.

In general, retained earnings represents accumulated earnings of the corporation less dividends paid.

The corporate _________________ is the legal document that authorizes the creation of a corporation.

Which of the following is true for a corporation that issues 1,000 shares of $2 par common stock at $5 per share?

The designated price for which employees may exercise stock options is called the ____________________ price.

Consider the following information from the financial statements of a retail company: Calculate the following financial ratios:

What will be the increase in the Paid-in capital in excess of par account if a corporation issues 20,000 shares of $1.00 par common stock for $6 per share?

Match the terms to the definitions. a.authorized shares i.stock option b.issued shares j.stock warrant c.outstanding shares k.treasury stock d.par value l.call provision e.stated capital (legal capital) m.earnings per share f.preemptive right n.dividend yield ratio g.retained earnings o.dividend payout ratio h.stock split -A measure of net income measured by each share of common stock.

The corporation's accumulated net income that has not been paid out as dividends is ____________________.

When a corporation issues a small stock dividend, which of the following is false?

Match the following terms to their correct definition. a.Articles of incorporation i.Equity b.Common stock j.Exercise (strike)price c.Contributed capital k.Liquidating dividend d.Corporate charter l.No-par stock e.Current dividend preference m.Payment date f.Date of record n.Preferred stock g.Declaration date o.Prior period adjustment h.Dividends in arrears p.Return on common equity -Provides that current dividends must be paid to preferred stockholders before any dividends are paid to common stockholders.

When treasury stock is reissued at a price that is greater than their cost, the difference should be credited to the Treasury Stock account.

A corporation may extend a tender offer when it desires to acquire treasury stock.

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

A corporation began operations on October 1, 2014, with 3,000 shares of $2 par common stock authorized. The company issued common stock on several occasions during 2014 and 2015. On December 31, 2015, the company repurchased 1,000 shares of its outstanding shares and then reissued 500 of these shares on March 1, 2016. On June 1, 2016, the company's board of directors declared a 2-for-1 stock split. As a result of this stock split, which of the following is true?

A corporation had several transactions affecting its stockholders' equity accounts during the year. In the space provided, show the impact on the accounting equation by placing a plus sign (+)for an increase, a minus sign (-)for a decrease, or N/A for no impact or no total net impact.