At March 31, 2014, the Park Place Company shows the following data on their balance sheet: \[\begin{array} { | l | r | } \hline \text { Stockholders' equity } & \\ \hline \begin{array} { l } \text { Common stock, } \$ 1 \text { par, } 1,000,000 \text { shares } \\ \text { authorized, } \end{array} & \$ 120,000 \\ \hline \begin{array} { l } 120,000 \text { shares issued, } 110,000 \text { shares } \\ \text { butstanding } \end{array} & \\ \hline \text { Paid-in capital in excess of par } & 2,470,000 \\ \hline \text { Retained earnings } & 5,440,000 \\ \hline \text { Treasury stock, } 10,000 \text { shares at } \$ 25 & ( 250,000 )\\ \hline \text { Total stockholder's equity } & \$ 7,780,000 \\ \hline \end{array}\] - Assume that Park Place sells 900 shares of treasury stock at $32 per share. Please restate the equity section of the balance sheet to reflect that transaction. \[\begin{array} { | l | l | l | } \hline \text { Stockholders' equity }\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad&\quad\quad\quad\quad &\quad\quad\quad \\ \hline & & \\ \hline & & \\ \hline\\ \hline & & \\ \hline\\ \hline \end{array}\]

\[\begin{array} { | l | r | } \hline \t

On July 31, 2013, the Archer Company reported the following information in the equity section of their balance sheet: \[\begin{array} { | l | r | } \hline \text { Stockholders' equity } & \\ \hline \begin{array} { l } \text { Common stock, } \$ 1.00 \text { par, } 500,000 \text { shares authorized, 20,000 shares } \\ \text { issued } \end{array} & \$ 20,000 \\ \hline \text { Paid-in capital in excess of par } & 1,180,000 \\ \hline \text { Retained earnings } & 3,200,000 \\ \hline \text { Total stockholder's equity } & \$ 4,400,000 \\ \hline \end{array}\] - Assume that Archer carries out a 2-for-1 stock split. Please prepare a similar equity section showing the effects of the stock split. \[\begin{array} { | l | l | l | } \hline \text { Stockholders' equity }\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad&\quad\quad\quad\quad &\quad\quad\quad \\ \hline & & \\ \hline & & \\ \hline\\ \hline & & \\ \hline\\ \hline \end{array}\]

\[\begin{array} { | l | r | } \hline \t

On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet: $\begin{array}{|l|r|r|} \hline \text { Stockholders' equity } & & \\ \hline \text { Common stock, } \$ 1 \text { par } & 100,000 \text { shares authorized } &\$40,000 \\ \hline & 40,000 \text { shares issued } & \\ \hline \text { Paid-in capital in excess of par } & & 260,000 \\ \hline \text { Retained earnings } & & 940,000 \\ \hline \text { Total stockholder's equity } & & \$ 1,240,000 \\ \hline \end{array}$ 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, how much would the total stockholders' equity be?

A) $1,240,000 B) $1,500,000 C) $1,260,000 D) $1,214,000 A) $1,240,000 B) $1,500,000 C) $1,260,000 D) $1,214,000

A corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $12.00 per share. \[\begin{array} {| l | r | } \hline \text { Common stock, } \$ 5 \text { par, } 100,000 \text { shares authorized, } & \\ 50,000 \text { shares issued } & \$ 250,000 \\ \hline \text { Paid in capital in excess of par-common } & 150,000 \\ \hline \text { Retained earnings } & 300,000 \\ \hline \text { Total stockholders' equity } & \$ 700,000 \\ \hline \end{array}\] Which of the following would be included in the entry to record a 10% stock dividend?

A) Common stock would be credited for $25,000. B) Common stock would be debited for $25,000. C) Paid-in capital in excess of par-common is debited for $35,000. D) Retained earnings would be credited for $60,000. A) Common stock would be credited for $25,000. B) Common stock would be debited for $25,000. C) Paid-in capital in excess of par-common is debited for $35,000. D) Retained earnings would be credited for $60,000.

On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet: $\begin{array}{|l|r|r|} \hline \text { Stockholders' equity } & & \\ \hline \text { Common stock, } \$ 1 \text { par } & 100,000 \text { shares authorized } &\$40,000 \\ \hline & 40,000 \text { shares issued } & \\ \hline \text { Paid-in capital in excess of par } & & 260,000 \\ \hline \text { Retained earnings } & & 940,000 \\ \hline \text { Total stockholder's equity } & & \$ 1,240,000 \\ \hline \end{array}$ 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 number of shares issued shown on the balance sheet?

A) 26,000 B) 66,000 C) 42,000 D) 105,000 A) 26,000 B) 66,000 C) 42,000 D) 105,000

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

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 900 shares of treasury stock at $32 per share. Please restate the equity section of the balance sheet to reflect that transaction. Stockholders' equity

(Essay)

4.8/5

(77)

Question 101

Alexander Company reported the ending balance of Retained earnings as $400,000 on December 31, 2013. During the first month of 2014, they discovered an error in the ledger which had the effect of overstating net income in 2013 by $45,000. At the end of 2014, they included this item as a prior period adjustment. Year 2014 results included $52,000 of net income and $15,000 of dividends paid. What amount would be shown as the ending balance of Retained earnings on the December 31, 2014 financial statements?

(Multiple Choice)

4.9/5

(64)

Question 102

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 total shareholders' equity would go down by $26,000.

(True/False)

4.9/5

(88)

Question 103

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 2-for-1 stock split. Please prepare a similar equity section showing the effects of the stock split. Stockholders' equity

(Essay)

4.9/5

(71)

Question 104

Certain types of transactions, other than dividend payments, that are NOT included in the income statement, but have an effect on retained earnings would be treated as part of comprehensive income.

(True/False)

4.9/5

(69)

Question 105

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 company will record a gain on the sale of treasury stock of $20,000.

(True/False)

4.9/5

(85)

Question 106

The purchase of treasury stock requires a credit to the Common stock account.

(True/False)

4.9/5

(81)

Question 107

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, how much would the total stockholders' equity be?

(Multiple Choice)

4.7/5

(72)

Question 108

A company originally issued 10,000 shares of $5 par value common stock at $7 per share. The board of directors declares a 10% stock dividend when the market price of the stock is $9 a share. Which of the following is included in the entry to record the stock dividend?

(Multiple Choice)

4.9/5

(86)

Question 109

Which of the following best describes extraordinary items on the income statement?

(Multiple Choice)

4.9/5

(76)

Question 110

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, which of the following statements would be TRUE?

(Multiple Choice)

5.0/5

(75)

Question 111

If a company's lenders wanted to ensure that the company maintained adequate levels of equity to pay back their loans, a good strategy would be to impose restrictions on dividend payments and purchases of treasury stock.

(True/False)

4.9/5

(73)

Question 112

Which of the following would be a reason for a company to appropriate a portion of retained earnings?

(Multiple Choice)

4.8/5

(83)

Question 113

A corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $12.00 per share. Common stock, \ 5 par, 100,000 shares authorized, 50,000 shares issued \ 250,000 Paid in capital in excess of par-common 150,000 Retained earnings 300,000 Total stockholders' equity \ 700,000 Which of the following would be included in the entry to record a 10% stock dividend?

(Multiple Choice)

4.9/5

(67)

Question 114

Which of the following statements is TRUE?

(Multiple Choice)

4.9/5

(79)

Question 115

Which of the following is NOT true of stock dividends?

(Multiple Choice)

4.8/5

(82)

Question 116

The entry to record an appropriation of retained earnings requires a debit to Retained earnings and a credit to Cash.

(True/False)

4.9/5

(80)

Question 117

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 total equity of the company would remain unchanged.

(True/False)

4.7/5

(88)

Question 118

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 number of shares issued shown on the balance sheet?

(Multiple Choice)

4.8/5

(81)

Question 119

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, what journal entry would be required?

(Multiple Choice)

4.9/5

(74)

Question 120

Certain types of transactions, other than dividend payments, that are NOT included in the income statement, but have an effect on retained earnings would be treated as part of comprehensive income.

The purchase of treasury stock requires a credit to the Common stock account.

A company originally issued 10,000 shares of $5 par value common stock at $7 per share. The board of directors declares a 10% stock dividend when the market price of the stock is $9 a share. Which of the following is included in the entry to record the stock dividend?

Which of the following best describes extraordinary items on the income statement?

If a company's lenders wanted to ensure that the company maintained adequate levels of equity to pay back their loans, a good strategy would be to impose restrictions on dividend payments and purchases of treasury stock.

Which of the following would be a reason for a company to appropriate a portion of retained earnings?

Which of the following statements is TRUE?

Which of the following is NOT true of stock dividends?

The entry to record an appropriation of retained earnings requires a debit to Retained earnings and a credit to Cash.

Corporations: Paid-In Capital and the Balance Sheet

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Management Accounting

Job Order and Process Costing

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Filters