Exam 17: Accounting for Stockholders Equity

Purrfect Paws Company issues 1,000 shares of $50 par preferred stock for $250,000.The company is not required to buy back the preferred stock.However,the preferred stock includes a redemption feature that gives the holder the option to redeem the shares for cash at specified dates.This would be classified as ________ under U.S.GAAP and ________ under IFRS.

On January 1,2014,TNT,Inc.issued 1,500 shares of $50 par value,convertible preferred shares for $150,000.Each preferred share is convertible into one share of $1 par common stock.On August 1,2015,all preferred shareholders converted their shares into common stock.What is the necessary journal entry to record the August 1st transaction?

The par value method is the most popular method of reporting treasury stock transactions.

Stockholders' equity represents the interest in a corporation held by the investors.

Dante,Inc.reacquired 20,000 shares of its common stock for $18 per share on January 31.On March 1 they sold 7,000 shares for $20 per share.On April 1 they sold 3,000 shares for $15 per share.What is the necessary journal entry for April 1?

TNT Corporation is authorized to issue 75,000 shares of $1 par value common stock.Prepare the journal entries for the following transactions (omit explanations): a.Issued 50,000 shares at $25 per share. b.Issued 500 shares in exchange for consulting services; the estimated fair value is $20 per share. c.Issued 7,000 shares at $30 per share,paying an underwriter $800 in stock issuance costs.

Unrealized gains and losses on trading securities are included in other comprehensive income.

Danio Fisheries issued 200,000 shares of $2 par value stock.The book value of Danio's common stockholders' equity is equal to $20 million.On August 1,Danio Fisheries implements a two-for-one stock split.After the stock split,the par value per share is ________ and the total book value is ________.

Caesar Cruise Lines,Inc.issues 2,000 shares of common stock with a $1 par value.The issue price of the stock is $18 per share,and the company paid an underwriter $400 in stock issue costs.What is the journal entry required to record the issuance of the shares?

Caesar & Company reacquired 30,000 shares of its common stock for $10 per share on March 1.On April 1 they sold 8,000 shares for $16 per share.On May 1 they sold 6,000 shares for $5 per share.Assuming no prior balance in the Additional Paid-in Capital From Treasury Stock Transactions,what is the ending balance in this account following these transactions?

On August 1,2015,Omega Co.declared and issued a 15 percent common stock dividend.Prior to this,Omega Co.had 50,000 outstanding shares of $2 par value common stock.The market value of Omega Co.'s stock was $18 per share at the time the dividend was issued.As a result of this stock dividend,Omega Co.'s total stockholders' equity ________.

Fancy Flights has 100,000 common shares outstanding,they are currently trading at $21 per share.Net income is $175,000.What is the Price-to-Earnings Ratio?

Which of the following is not a type of dividend?

S & C Company issues 1,500 shares of its no-par common stock.The issue price of the stock is $13 per share.What is the journal entry required to record the issuance of the shares?

The Magic Flute Company paid cash dividends totaling $250,000 in 2013 and $175,000 in 2014.In 2015,the company will pay cash dividends of $950,000.There were no dividends in arrears as of January 1,2013.There are 25,000 shares of common stock outstanding and 70,000 shares of 6 percent,$100 par cumulative preferred. What is the amount of cash dividends payable to common stockholders in 2015?

Other comprehensive income includes income items that bypass the income statement.

Rouge Corp.has 75,000 shares of $2 par common stock and 30,000 shares of $14 par fully participating 8% cumulative preferred stock.The company declares cash dividends of $60,000 during the current year and there are $8,000 dividends in arrears.What will be the total dividend payment to common and preferred shareholders?

When earnings are volatile,the ________ ratio can be useful in evaluating a company because ________ value is generally more stable than net income.

Syd's Co.reported comprehensive income of $7,600 for the current year.It had unrealized losses on available-for-sale securities of $1,700 after tax,and a foreign currency translation gain of $1,500 after tax.What is net income for the current year?

When accounting for cash dividends,a formal accounting entry is made for which dates?