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

A corporation originally issued $8 par value stock for $9 per share. It purchased the stock for $10 per share for the treasury. Which of the following would be included in the entry to record the reissue of 20 shares of treasury stock for $11 per share?

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, the total equity of the company will go down by $70,000.

The entry to record a stock dividend depends on its size. Which of the following percentages is the upper limit for a stock dividend to be classified as a small stock dividend?

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 - 0 Assume that Park Place sells 900 shares of treasury stock at $32 per share. What will the total equity be after this transaction?

On March 1, 2013, Parkinson Company originally issued 10,000 shares of common stock at $4.00 per share. The stock had a par value of $0.01 per share. On March 1, 2012, Parkinson distributed a 12% stock dividend; the market price at that time had dropped to $3.75 per share. Parkinson must record a loss of $300.

A corporation must record a gain on sale for the sale of treasury stock at an amount greater than its purchase price.

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 company would record a loss on the sale of treasury stock for $4,000.

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, what journal entry will be required?

Which of the following will happen to a stockholder's percentage ownership in the stock of a corporation when the corporation declares a stock dividend?

The treasury stock account is:

Which of the following actions will increase the balance in the Common stock account?

Which of the following is a TRUE 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, which of the following statements would be TRUE?

Comprehensive income is equal to the net income of a company, excluding the effects of discontinued operations and extraordinary items.

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 that there are 200,000 shares issued.

Which of the following statements is TRUE?

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 "bottom line" net income (loss)?

Gains and losses from the disposal of old plant and equipment are reported as other gains or losses in the multi-step income statement.

Which of the following is a reason why a company would do a stock split?

Which of the following would be included in the entry to record a 2-for-1 stock split?