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

Which of the following statements is TRUE?

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, the number of shares outstanding will go down by 10,000.

Which of the following actions could increase the balance in the Paid-in capital in excess of par account?

Stock dividends are declared by the:

On June 30, 2014, 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, 2014, Stephans distributed a 5% stock dividend. The market value of the stock at that time was $13 per share. - Following this transaction, the number of shares authorized would stay the same, but the number of shares issued would go up by 5%.

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, what journal entry will be made?

Which of the following occurs when a corporation distributes a stock dividend?

At January 1, 2013, 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, 2013, Foxmore had 120,000 shares of common stock outstanding, and no preferred stock. In addition, Foxmore reported the following results for the year 2013: 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 tax 120,000 Losses on damage caused by earthquake, net of tax 280,000 - Please prepare earnings per share information in the following format. (Round all amounts to nearest cent.) Earnings per share Income (loss) from continuing operations Income (loss) from discontinued operations Income (loss) before extraordinary items Extraordinary loss Net income (loss)

Which of the following items is NOT included in comprehensive income?

The sale or other disposition of a segment of a business is recorded as an extraordinary gain or loss.

What type of account is treasury stock?

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 \ - What would be the Total stockholders' equity after a 10% common stock dividend?

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, which of the following statements would be TRUE?

Which of the following statements is TRUE about prior period adjustments?

Which of the following occurs when the board of directors declares a 2-for-1 stock split on 20,000 outstanding shares of $15 par common stock?

Which of the following occurs when a corporation's board of directors distributes a 10% stock dividend?

If a company does not have enough cash to pay out regular dividends, but still wishes to give the shareholders something that they would consider of value, the company should consider doing a stock split.

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 - (Assume there are no balances in Paid-in capital from treasury stock transactions.) If Peartree resold 800 shares of treasury stock for $15 per share, what journal entry would be required?

Which of the following BEST describes operating income?

For the year 2013, Foxmore Company reports the following items as part of their financial results: 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 -For the year 2013, Foxmore Company reports the following items as part of their financial results: 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 How much is the income (loss) from continuing operations, after tax?