Exam 12: Stockholders Equity

Why might someone prefer to invest in a company by purchasing preferred stock rather than common stock?

Randolph Corporation has 24,000 shares of 11 percent noncumulative preferred stock and 60,000 shares of common stock outstanding.Par value for each is $20.The company paid no dividends last year.This year,a $200,000 dividend is paid.How much of the $200,000 is paid to the preferred shareholders?

Which of the following would not be an account in the general ledger of a corporation?

The board of directors carries out the day-to-day operations of the business.

No rights or privileges are associated with common stock.

Margil Industries has 40,000 shares of 9 percent cumulative preferred stock and 30,000 shares of common stock outstanding.Par value for each is $50.The company has paid no dividends for the past two years.This year,a $620,000 dividend is paid.How much of the $620,000 is paid to the common shareholders?

Duncan Corporation has 2,000 shares of $100 par value,6 percent cumulative preferred stock and 20,000 shares of $10 par value common stock outstanding.In its first four years of operation,Duncan Corporation paid cash dividends as follows: 2010,$15,000; 2011,$0; 2012,$20,000; 2013,$25,000.Calculate the total cash dividends received by owners of preferred and common stock in each year.

A large stock dividend normally results in a transfer from Retained Earnings to Contributed Capital of an amount equal to the par value of the stock.

If only common stock is outstanding,total stockholders' equity divided by the number of shares of common stock outstanding is called the

Which of the following could be described as both an advantage and a disadvantage of incorporation?

The price/earnings (P/E)ratio is measured in terms of

The board of directors of Blount Corporation declared a cash dividend of $5.00 per share on 57,000 shares of common stock on April 14,2013.The dividend is to be paid on May 15,2013,to shareholders of record on May 1,2013.The proper entry to be recorded on April 14,2013,will be:

Compute the book values per share for (a)preferred and (b)common stock for Klemperer Corporation,whose stockholders' equity as of December 31,2013,was as follows.

How should dividends in arrears be shown on a corporation's balance sheet?

All of the following would appear on the statement of stockholders' equity except

Most preferred stocks are callable preferred stocks,which means that the callable feature may be exercised by

Retained earnings are a component of contributed capital.

Callable preferred stock is preferred stock that may be redeemed or retired at the option of the stockholder.

The sale of treasury stock cannot result in

Which of the following classifications represents the fewest shares of common stock?