Exam 11: Corporations: Organization,stock Transactions,and Dividends

166. The following transactions took place for the XYZ Corporation: November 12 - Declared a total cash dividend of $45,000 for stockholders of record November 20 payable on December 1. Record the journal entries required by these events. Briefly describe the significance of November 20.

The declaration of a cash dividend decreases a corporation's stockholders equity and decreases its assets.

Texas Inc.has 10,000 shares of 6%,$125 par value,cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31.What is the annual dividend on the preferred stock?

The liability for a dividend is recorded on which of the following dates?

A reduction of par or stated value of stock results from a

Paid-in capital may originate from real estate transactions.

A corporation purchased 1,000 shares of its own $5 par common stock at $10 and subsequently sold 500 of the shares at $20.What is the amount of revenue realized from the sale?

If a corporation is liquidated,preferred stockholders are paid before the creditors and before the common stockholders.

Under the Internal Revenue Code,corporations are required to pay federal income taxes.

Sabas Company has 20,000 shares of $100 par,2% cumulative preferred stock and 100,000 shares of $50 par common stock.The following amounts were distributed as dividends: Year 1: \ 10,000 Year 2: 45,000 Year 3: 90,000 Determine the dividends in arrears for preferred stock for the second year.

Before a stock dividend can be declared or paid,there must be sufficient cash.

Which of the following is not a right possessed by common stockholders of a corporation?

For accounting purposes,stated value is treated the same way as par value.

The excess of sales price of treasury stock over its cost should be credited to

The two main sources of stockholders' equity are

A 10% stock dividend will increase the number of shares outstanding but the book value per share will decrease.

Earnings per share

Characteristics of a corporation include

The amount of a corporation's retained earnings that has been restricted/appropriated should be reported in the notes to the financial statements.

On January 1,Vermont Corporation had 40,000 shares of $10 par value common stock issued and outstanding.All 40,000 shares had been issued in a prior period at $20.00 per share.On February 1,Vermont purchased 3,750 shares of treasury stock for $24 per share and later sold the treasury shares for $21 per share on March 1. The journal entry to record the purchase of the treasury shares on February 1,would include a