Exam 11: Proprietorships,partnerships,and Corporations

Ix Company issued 20,000 shares of $20 par value common stock at a market price of $32.As a result of this accounting event,the amount of stockholders' equity would

Discuss some of the information items normally included in a corporation's articles of incorporation.

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.Use only one letter for each element.You do not need to enter amounts. -The Craig Corporation began operations on January 1,2016 by issuing 5,000 shares of $6 par-value stock at $12.Indicate the effects of this transaction on the financial statements.

The payment of a previously declared cash dividend will

Preferred stockholders' claims to a corporation's assets take precedence over the claims of some creditors.

Franklin Corporation reported net income of $75,000 in 2016.The company had 100,000 shares of $12 par value common stock outstanding and a market price of $18 per share.Franklin's price-earnings ratio was

Steger Corporation was organized on July 15,2016.It was authorized to issue 150,000 shares of $5 par value common stock and 50,000 shares of 9% cumulative class A preferred stock.The class A preferred stock had a stated value of $10 per share.The following stock transactions relate to Steger Corporation. 1)Issued 50,000 shares of common stock for $22 per share. 2)Issued 4,000 shares of the class A preferred stock for $20 per share. 3)Issued 27,500 shares of common stock for $28 per share. Prepare the general journal entries for the above transactions.

Use the following to answer questions Gilligan Corporation was established on February 15,2014.Gilligan is authorized to issue 500,000 shares of $6.00 par value common stock.As of December 2016,Gilligan's stockholders' equity accounts report the following balances: At the end of 2016,Gilligan decides to issue a 5% stock dividend. At the time of issue,the market price of the stock was $22 per share. -What is the correct journal entry to record this transaction?

The balance sheet of a sole proprietorship will report two equity accounts: one for amounts contributed by the owner,and one for the earnings of the business.

Curtain Co.paid dividends of $6,000;$12,000;and $20,000 during 2014,2015 and 2016,respectively.The company had 1,000 shares of 5%,$200 par value preferred stock outstanding that paid a cumulative dividend.The amount of dividends received by the common shareholders during 2016 would be:

Use the following to answer questions On March 1,2016,Gilmore Incorporated declared a cash dividend on its 1,500 outstanding shares of $50 par value,6% preferred stock.The dividend will be paid on May 1,2016 to the stockholders of record as of April 1,2016. -Which of the following reflects the financial statement effects on the May 1,2016 date of payment?

The number of shares of stock outstanding generally is greater than the number of shares of stock issued.

The following items appeared on the financial statements of Monroe,Inc.on December 31,2015: On September 10,2016,when the market value of the Monroe stock was $140 the company declared and distributed an 8% stock dividend.Indicate whether each of the following statements is true or false. _____ a)Retained earnings would increase by $224,000 as a result of the stock dividend. _____ b)The balance in common stock would increase by $64,000 as a result of the stock dividend. _____ c)Total paid-in capital would be $2,224,000 after the dividend had been distributed. _____ d)Total equity would not be affected by the dividend. _____ e)Cash flow from financing activities would increase by $224,000 as a result of the stock dividend.

The Curtis Company was started on January 1,2016 as a sole proprietorship.The initial investment from Charlotte Curtis,the owner,was $80,000.During 2016,the business earned $60,000 in cash revenue and paid $45,000 in cash expenses.Ms.Curtis withdrew $7,000 for her personal use.Using the above information,prepare an income statement,a capital statement,and a balance sheet for the Curtis Company.

Loudoun Corporation's balance sheet reflected the following information. Assuming all the stock was issued in a single transaction,what was the issue price per share of the stock?

Lack of ease in transferability of ownership is one of the important disadvantages of the corporate form of business organization.

Explain the significance of (a)a high,and (b)a low,price-earnings ratio.

Show the effect of a stock dividend on the accounting equation.

A purchase of treasury stock is an asset use transaction.

On September 1,2016,Orville Corporation has unrestricted Retained Earnings of $600,000,Appropriated Retained Earnings of $400,000,Cash of $850,000,and Accounts Payable of $50,000.What is the maximum amount that can be used for cash dividends?