Exam 12: Corporations: Paid-In Capital and the Balance Sheet

Pearland Company has 2,000 shares of preferred stock outstanding. The preferred stock has a $100 par value, a 5% dividend rate, and is non-cumulative. If Pearland has sufficient funds to pay dividends, what is the total amount of dividends that will be paid out to preferred shareholders?

Lerner Company had the following transactions in 2013, its first year of operations. • Issued 20,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $14.00 Per share. • Issued 1,000 shares of $100 par value preferred stock. Shares were issued at par. • Earned net income of $35,000. • Paid no dividends. - At the end of 2013, what is the total amount of Paid-in capital?

Which of the following describes the par value of stock?

Orleans Company was incorporated on January 1, 2012. Orleans issued 4,000 shares of common stock and 500 shares of preferred stock on that date. The preferred shares are cumulative, $100 par, with an 8% dividend rate. Orleans has not paid any dividends yet. In 2015, Orleans had its first profitable year, and on November 1, 2015, Orleans declared a total dividend of $28,000. What is the total amount that will be paid out to preferred shareholders?

Moretown Company had the following transactions in 2014, its first year of operations. • Issued 30,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $18.00 Per share. • Earned net income of $70,000. • Paid no dividends. - At the end of 2014, what is the total amount of Paid-in capital?

If a company has a strong rate of return on total assets, that shows that they can easily pay off their current liabilities with their current assets.

Paying dividends causes a decrease in total paid-in capital.

Chaney Corporation issued 20,000 shares of common stock on January 1, 2014. The stock has par value of $1.00 per share and was sold at $30 per share. The journal entry for this transaction would:

Origami Company is considering a new project and needs to raise $800,000 of capital. Their after-tax net income would be $75,000 if they do not implement the new project. If the new project is implemented, it will add an additional $50,000 of profits before tax and interest. Origami's income tax rate is 40%. If they use debt financing, the interest will be at 5%. - Origami has 25,000 shares of common stock outstanding and no preferred stock. If Origami decides to implement the project using debt financing, what will be the earnings per share amount? (Please round to the nearest cent.)

Notebook Company had the following transactions in 2014, its first year of operations. • Issued 2,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $50.00 per share. • Issued 100 shares of $100 par value preferred stock. Shares were issued at par. • Earned net income of $95,000. • Paid dividends of $5,000. The company charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock. Please provide the stockholders' equity section of the balance sheet at December 31, 2014. Include information on par values, and the number of shares authorized and issued, where necessary. No subtotals are needed for total paid-in capital, but please show total stockholders' equity on the bottom line. Account Par value info Shares authorized Shares issued Balance

Quad Sales has the following information for the year 2015: Total assets, January 1 \ 102,000 Total assets, December 31 108,000 Net income 2,100 Interest expense 0 How much is the return on total assets? (Please round to two decimal places.)

Chaney Corporation issued 20,000 shares of common stock on January 1, 2014. The stock has par value of $1.00 per share and was sold at $30 per share. Please provide the journal entry for this transaction.

A corporation has 15,000 shares of 10%, $50 par cumulative preferred stock outstanding and 25,000 shares of no-par common stock outstanding. Dividends of $37,500 are in arrears. At the end of the current year, the corporation declares a dividend of $120,000. How is the dividend allocated between preferred and common shareholders?

Most preferred stock is non-cumulative.

A company had $80,000 of Sales revenue and $75,000 of Expenses. Which of the following would be the first of three year-end closing entries?

Which of the following describes the term outstanding stock?

Hot Tamale Company had $120,000 of revenues and $125,000 of expenses. No dividends were paid. The second of the year-end closing entries should include which of the following line items?

Peterson Company issued 4,000 shares of preferred stock for $240,000. The stock has a par value of $60 per share. Please provide the journal entry for this transaction.

Please refer to the equity section of the balance sheet, below: Preferred stock, \ 50 par, 4\% , cumulative \ 5,000 1,000 shares authorized, 100 shares outstanding Common stock, \ 0.01 par 120 1,000,000 shares authorized, 12,000 shares outstanding Paid-in capital in exces of par 359,600 Retained earnings 153,280 Total stockholders' equity \ 518,000 - Assume there are $600 of preferred dividends in arrears which includes the current year. What is the book value per share of common stock?

Which of the following represents one of the basic rights of stockholders?