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

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 total equity of the company will go up by $18,000.

ABC has 45,000 shares of $10 par common stock outstanding. They offer a stock split of 4-for-1. The effect of the split will be:

Which of the following will decrease the amount of Total stockholders' equity?

Companies are NOT allowed to combine the income statement and the statement of retained earnings, but must show them as two separate reports.

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 is sued, 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 Park Place purchases an additional 2,000 shares of treasury stock at $25 per share. What will the total equity be after this transaction?

Unrealized gains or losses on certain investments, foreign currency translation adjustments, gains and losses from post-retirement benefit plans, and deferred gains and losses from derivatives are subject to specialized accounting treatment. These items would normally be found on the:

Happy Holiday, Inc. has 100,000 shares of common stock issued and outstanding, with a par value of $0.01 per share. They distributed a 15% common stock dividend; market value is $12 per share. Please provide the journal entry to record this transaction.

Preferred Products started business on March 1, 2012, and issued 100,000 shares of $2 par value common stock at a market price of $50 per share. One year later, the share price had soared to $120. If Preferred Products does a 3-for-1 stock split, the balance sheet will show common stock with a par value of $0.67 per share.

Comprehensive income is the company's change in total stockholders' equity from all sources other than its owners, and sometimes includes items not found on the income statement.

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. Which of the following is the correct journal entry to record this transaction?

Rakish Co. purchases 3,500 shares of its own $1 par value common stock for $80 per share. Which of the following is the correct journal entry to record this transaction?

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 income (loss) for extraordinary items? (Please round all calculations to the nearest cent.)

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 sells 10,000 shares of treasury stock at $14 per share, which of the following would be TRUE?

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 Paid-in capital in excess of par?

Which of the following would have the same effect on the number of shares issued and outstanding as a 2-for-1 stock split?

Which of the following items would NOT be shown on a combined statement of income and retained earnings?

Happy Holiday, Inc. has 100,000 shares of common stock issued and outstanding, with a par value of $0.01 per share. They distributed a 15% common stock dividend; market value is $12 per share. Which of the following is the correct journal entry to record the transaction?

A 3-for-1 stock split will:

Public companies are required to publish financial statements, but privately held companies are generally not required to do so.

Which of the following statements is TRUE?