Exam 13: Accounting for Corporations

A corporation declared and issued a 15% stock dividend on October 1. The following information was available immediately prior to the dividend: Retained earnings \ 750,000 Shares issued and outstanding 60,000 Market value per share \ 15 Par value per share \ 5 The amount that contributed capital will increase (decrease) as a result of recording this stock dividend is:

All of the following statements regarding stock dividends are true except:

The number of shares that a corporation's charter allows it to sell is referred to as:

Shaw Corporation reported stockholders' equity on December 31 of the prior year as follows: Common stock, \5 par value, 1,000,000 shares \ 2,500,000 authorzed, 500,000 shares istued ...... Paid-in capital in excess of par, common stock \ldots 1,000,000 Retained earnings \ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots 3,000,000 The following selected transactions occurred during the current year: Feb. 15 The board of directors declared a 5% stock dividend to stockholders of record on March 1, payable March 20. The stock was selling for $8 per share. Mar. 9 Distributed the stock dividend. May 1 A cash dividend of $0.30 per share was declared by the board of directors to stockholders of record on May 20, payable June 1. June 1 Paid the cash dividend. Aug. 20 The board decided to split the stock 4-for-1, effective on September 1. Sept. 1 Stock split 4-for-1. Dec. 31 Earned a net income of $800,000 for the current year. Prepare a statement of retained earnings as of December 31 of the current year.

A corporation reports the following year-end stockholders' equity: $\text { Paid-in capital: }$ Preferred stock, 8\%, 100,000 shares authorized, 50,000 shares issued \ 2,500,000 Paid-in capital in excess of par, Preferred 125,000 Common stock, \ 1 par, 5,000,000 shares authorized, 4,000,000 shares issued 4,000,000 Paid-in capital in excess of par, Common 1,200,000 Total paid-in capital \ 7,825,000 Retained earnings 10,675,000 Total stockholders' equity \1 8,500,000 Determine the following: (1)Par value for the preferred stock. (2) Book value per share for both preferred stock and common stock assuming no dividends in arrears.

A corporation issued 100 shares of its $5 par value common stock in payment of a $1,800 charge from its accountant for assistance in filing its charter with the state. The entry to record this transaction will include:

Mayan Company had net income of $132,000. The weighted-average common shares outstanding were 80,000. -The company has no preferred stock. The company sold 3,000 shares before the end of the year. There were no other stock transactions. The company's earnings per share is:

A stock dividend is recorded with a transfer from:

A corporation's distribution of additional shares of its own stock to its stockholders without the receipt of any payment in return is called a:

The Discount on Common Stock account reflects:

When no-par stock is not assigned a stated value, the total amount received is recorded in the Common Stock account.

____________is the annual amount of cash dividends per share distributed to common shareholders relative to the stock's market price.

Given the following information about a corporation's current year activities, compute the retained earnings for the current year. Retained earnings, December 31 (prior year) \ 280,000 Cost of goods sold \ 90,000 Other operating expenses \ 54,000 Cash dividends \ 31,800 Correction of understatement of net income in prior period (inventory error) \ 23,000 Stock dividends \ 20,000 Net income \ 36,000

Percy Corporation was formed on January 1. The corporate charter authorized 100,000 shares of $10 par value common stock. During the first month of operation, the corporation issued 400 shares to its attorneys in payment of a $5,000 charge for drawing up the articles of incorporation. The entry to record this transaction would include:

A company's board of directors votes to declare a cash dividend of $.75 per share of common stock. The company has 15,000 shares authorized, 10,000 issued, and 9,500 shares outstanding. The total amount of the cash dividend is:

Dividend yield is defined as the annual cash dividends per share divided by the market price per share of a company's stock.

Stock that has been issued and is held by stockholders is ________ stock.

A corporation had stockholders' equity on January 1 as follows: Common Stock, $1 par value, 1,500,000 shares authorized, 600,000 shares issued; Paid-in Capital in Excess of Par Value, Common Stock, $1,100,000; Retained Earnings, $2,300,000. Prepare journal entries to record the following transactions: Feb. 15 The board of directors declared a 10% stock dividend to stockholders of record on March 1, to be issued on April 15. The stock was trading at $12 per share prior to the dividend. Mar. 31 Sold 100,000 shares of common stock for $13 per share. Apr. 15 Issued the stock dividend.

The amount of income earned per share of a company's outstanding common stock is known as:

The costs of bringing a corporation into existence, including legal fees, promoter fees, and amounts paid to obtain a charter are called: