Exam 10: Stockholders Equity

MATCHING -The preferred stock feature which provides for preferred stock to be exchanged for common stock.

The following stockholders' equity appeared on a balance sheet at December 31, 2014:

Dividends in arrears are associated with the cumulative preferred stock only.

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 -Refers to a situation where an error resulted in a misstatement of net income and the correction requires a debit or credit to retained earnings.

A corporation is authorized by its corporate charter to issue 50,000 shares of preferred stock with a 7% dividend rate and a par value of $10 per share, and 750,000 shares of common stock with a par value of $2 per share. On January 15, 2014, 2,000 shares of preferred stock was issued for $14 per share along with 10,000 shares of common stock for $2.50 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 -Authorization for the corporation to redeem preferred shares in the future.

Consider the following financial statement information: Calculate the following ratios: - dividend yield; - dividend payout; - total payout; and - stock repurchase payout.

Common stock usually has all of the following features except

Selected data from the company's financial statements are presented below: -Refer to Labor Finders, Inc. The company's 2015 earnings per share is reported as

What is the difference between authorized, issued, and outstanding shares?

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 -A performance measures that assesses the growth in equity from operating activities.

Refer to Lanier Tech. What is the number of the company's unissued shares of common stock at December 31, 2015?

When is a liability for dividends created?

Lakeside Properties, Inc. had 50,000 shares of 5%, $20 par preferred stock and 400,000 shares of $8 par common stock issued and outstanding at the beginning of 2015. Indicate the effect each of the following items has directly on retained earnings by writing the amount in the space provided. Use a plus sign (+)in front of the amount to indicate increases in retained earnings, and use parentheses ( )around the amount to indicate decreases in retained earnings. If the transaction results in no direct change in retained earnings, place N/A in the space.

A corporation had several transactions affecting its stockholders' equity accounts during the year. The transactions are presented in chronological order. In the space provided, indicate the impact on the equity accounts shown by placing the respective dollar amounts along with a plus sign (+)for an increase in the account balance, minus sign (-)for a decrease, or N/A if there is no impact on the account balance.

The par value of stock is reduced when stock dividends are issued.

Treasury stock is stock that has been issued but is no longer outstanding.

-Refer to Lakeshore Industries. What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share at the time the stock split is declared?

The _______________ dividend preference is a preferred stock feature that provides for the current stated dividends plus a share of dividends available for distribution to other classes of stockholders.

Earnings per share is an indication of how much