Exam 11: Stockholders Equity

Name two different examples of items that can be received (in addition to cash)in exchange for issuing stock.Describe how the value of each item affects additional paid-in capital.

The Stockholders' Equity section of the balance sheet of Sea Turtle Company reveals the following information: Common stock \ 3 par value \ 150,000 Additional paid-in capital? common 850,000 There have been two issues of stock since the corporation began business.The average issue price per share of stock was

The cumulative feature of stock allows the firm to eliminate a class of stock by paying the stockholders a specified amount.

A liability for dividends is created at the

Debbie and Alex formed a new partnership.The partnership agreement specified that income should be allocated in a 2-to-1 ratio,with Debbie receiving the larger portion.If revenue for the first year was $90,000 and expenses were $60,000,how much would be allocated to each partner?

Lemon Company reported the following amounts on its balance sheet at January 1, 2017: Preferred stock, \ 10 par, 5\%, 1,000 shares issued and outstanding \ 10,000 Common stock, \ 1 par, 8,000 shares issued and outstanding 8,000 Additional paid-in capital-common Total contributed capital \ 70,000 Retained earnings Total stockholders' equity The following transactions occurred during 2017: 1. Declared a 20% stock dividend on preferred stock on May 21, when the stock was selling at $15 per share. The stock dividend will be distributed on June 30, 2017. 2. Distributed the preferred stock dividend on June 30. Show the effects of the transactions on the accounting equation and prepare the Stockholders' Equity section of Lemon's balance sheet at December 31, 2017.

Anole Company Anole Company was incorporated as a new business on January 1, 2017. The company is authorized to issue 20,000 shares of $5 par value common stock and 10,000 shares of 6%, $10 par value, cumulative, participating preferred stock. On January 1, 2017, the company issued 8,000 shares of common stock for $15 per share and 2,000 shares of preferred stock for $30 per share. Net income for the year ended December 31, 2017, was $375,000. -Refer to the information about Anole Company. Anole's total stockholders' equity reported on the balance sheet at December 31,2017,is

Derek and Kent are partners.At the beginning of the current year,Derek's capital account is $30,000,while Kent's is $50,000.The partners decided to allocate income with 10% interest on capital balances at the beginning of the period and divide the balance equally.Net income for the current year,2017,is $80,000.Each partner withdrew $15,000 for personal use during the year.Determine the amount of income that each partner will be allocated.

An accounting transaction is not recorded when a corporation declares and executes a stock split.

What is comprehensive income,and what is contained in a statement of comprehensive income?

The Stockholders' Equity section of Stallion Tack Shack balance sheet on January 1,2017,appeared as follows: Common stock, \ 5 par, 30,000 shares issued and outstanding \ 150,000 Additional paid-in capital-common 120,000 Retained earnings 300,000 Total stockholders' equity \ 570,000 On March 1,2017,Stallion reacquired 3,000 shares of common stock at $8 per share.Answer the following questions: A) What amount would be reported on the March 31,2017 , bal ance sheet for treasury stock? B) What is the number of outstanding shares at March 31, 2017? C) How much is total stockholders' equity to be reported on the March 31,2018 , balance sheet?

A __________ allows preferred stockholders to share on a percentage basis in the distribution of an abnormally large dividend.

Information taken from the accounting records of Airways,Inc. ,for the year ended December 31,2017,appears in the table below.In the space provided,indicate in which section of the statement of cash flows (investing or financing)each item would be reported and whether the item is a cash inflow or outflow.If an item is neither an investing activity nor a financing activity,place an X in the box. Transaction Cash Flow Section Inflow or Outflow a. Proceeds from sale of investment, \ 65,000 b. Proceeds from borrowing from the bank, \ 32,000 c. Dividends declared, \ 68,000 d. Repayments of long-term debt, \ 21,000 e. Preferred shares issued, \ 140,000 f. Preferred shares converted into common stock; the market value at time of exchange, \ 35,000 g. Dividends paid to shareholders, \ 43,000 h. Treasury stock purchases, \ 15,000

All changes in all stockholders' equity accounts must be shown in the Stockholders' Equity section of the balance sheet.

The document that specifies how much the owners will invest,what their salaries will be,and how profits will be shared in a partnership is known as a __________.

What is the difference between par value and market value? Which is the better indicator of the true worth of the stock?

Explain the difference between authorized,issued,and outstanding shares.

Which of the following statements regarding partnerships is true?

The statement of stockholders' equity is useful in evaluating a company's liquidity.

If a company purchases treasury stock for $10,000 and then reissues it for $3,000,the difference of $7,000 is