Exam 13: Corporations: Effects on Retained Earnings and the Income Statement

At January 1, 2014, Foxmore Company had 80,000 shares of common stock outstanding and no preferred stock. During the year, they issued 40,000 additional shares of common stock. At December 31, 2014, Foxmore had 120,000 shares of common stock outstanding, and no preferred stock. In addition, Foxmore reported the following results for the year 2014: Sales revenues from regular business operations \ 3,000,000 Cost of goods sold 900,000 Operating expenses from their regular business operations 600,000 Gain on disposal of several items of property, plant \& equipment 15,000 Income tax expense on continuing operations 330,000 Loss on the termination of a discontinued business segment, net of Lax 120,000 Losses on damage caused by earthquake, net of tax 280,000 - At December 31, 2014, how much is the earnings per share for total net income (loss)? (Please round all calculations to the nearest cent.)

Apira has 2,000 shares of common stock outstanding. A stockholder has 100 shares. If Apira distributes a 20% stock dividend, how many shares of Apira will the stockholder have?

On December 1, 2014, Arbor Company had 20,000 shares of $1 par value common stock issued and outstanding. The next day they distributed a 50% stock dividend. The market value of the stock on that date was $9 per share. Please provide the journal entry for the transaction. Which of the following is the correct journal entry to record this transaction?

During the current year, a corporation has 2,000 shares of 10%, $50 par, cumulative preferred stock outstanding and 6,000 shares of $10 par common stock outstanding. The company has net income of $53,000 and paid all preferred dividends as usual. Compute earnings per share. Round all amounts to nearest cent.

At March 31, 2014, the Park Place Company shows the following data on their balance sheet: Stockholders' equity Common stock, \ 1 par, 1,000,000 shares authorized, \ 120,000 120,000 shares issued, 110,000 shares butstanding Paid-in capital in excess of par 2,470,000 Retained earnings 5,440,000 Treasury stock, 10,000 shares at \ 25 (250,000) Total stockholder's equity \ 7,780,000 - Assume that Park Place sells 2,500 shares of treasury stock at $20 per share. Please restate the equity section of the balance sheet to reflect that transaction. Stockholders' equity

Lenders may restrict the amount of treasury stock a corporation may purchase in order to ensure a minimum level of stockholders' equity.

The declaration of a stock dividend creates a liability for the corporation.

Please refer to the following information for Peartree Company: • Common stock, $1.00 par, 100,000 issued, 95,000 outstanding • Paid-in capital in excess of par: $2,150,000 • Retained earnings: $910,000 • Treasury stock: 5,000 shares purchased at $20 per share - If Peartree resold 1,000 shares of treasury stock for $24 per share, the company would record a gain on sale of treasury stock for $4,000.

Which of the following does NOT require a formal journal entry?

Which of the following best describes other gains (losses) on the income statement?

On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet: Stockholders' equity Common stock, \ 1 par 100,000 shares authorized \4 0,000 40,000 shares issued Paid-in capital in excess of par 260,000 Retained earnings 940,000 Total stockholder's equity \ 1,240,000 On July 1, 2013, Stephans distributed a 5% stock dividend. The market value of the stock at that time was $13 per share. -Following this transaction, what would be the new balance in the Common stock account?

Please refer to the following information for Peartree Company: • Common stock, $1.00 par, 100,000 issued, 95,000 outstanding • Paid-in capital in excess of par: $2,150,000 • Retained earnings: $910,000 • Treasury stock: 5,000 shares purchased at $20 per share - If Peartree purchases an additional 1,000 shares of treasury stock at $18 per share, the company will record a loss of $2 per share on the transaction.

Landess Corporation currently has 120,000 shares outstanding of $1 par value common stock. The stock was originally issued for $12 per share. On March 15, the board of directors declares a 10% stock dividend when the stock is selling for $16 per share. Prepare the journal entry to record the stock dividend.

Please refer to the following information for Petra Sales Company: • Common stock, $1.00 par, 200,000 issued, 180,000 outstanding • Paid-in capital in excess of par: $1,600,000 • Retained earnings: $2,440,000 • Treasury stock: 20,000 shares purchased at $12 per share - If Petra Sales purchases an additional 5,000 shares of treasury stock at $14 per share, what number of shares will be shown as issued and outstanding?

Which of the following occurs due to a 4-for-1 stock split?

On January 1, 2013, Parquet Sales issued 40,000 shares of common stock at a price of $22 per share. The stock has a par value of $1.00 per share. In mid-2014, due to dramatic increases in profits, the stock reached a market value of $90 per share. The board of directors approved a 2-for-1 stock split. After the stock split, what will the balance sheet show as the par value of common stock?

Please refer to the following information for Peartree Company: • Common stock, $1.00 par, 100,000 issued, 95,000 outstanding • Paid-in capital in excess of par: $2,150,000 • Retained earnings: $910,000 • Treasury stock: 5,000 shares purchased at $20 per share - If Peartree resold 800 shares of treasury stock for $15 per share, the total equity of the company would remain unchanged.

A stock split is an increase in the number of issued and outstanding shares of stock, coupled with a proportionate reduction in the par value of the stock.

On July 31, 2013, the Archer Company reported the following information in the equity section of their balance sheet: Stockholders' equity Common stock, \ 1.00 par, 500,000 shares authorized, 20,000 shares issued \ 20,000 Paid-in capital in excess of par 1,180,000 Retained earnings 3,200,000 Total stockholder's equity \ 4,400,000 - Assume that Archer carries out a 4-for-1 stock split. Please prepare a similar equity section showing the effects of the stock split. (Please round all numbers to the nearest cent.) Stockholders' equity

Gordon Corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $11.50 per share. Common stock, \ 5 par, 100,000 shares authorized, 40,000 shares issued \ 200,000 Paid in capital in excess of par-common 120,000 Retained earnings Total stockholders' equity \ - After a 2-for-1 stock split, what would the number of shares issued be?