Exam 11: Stockholders Equity

Body Sports is a surf shop owned by Chris,Nicole,and Dan in partnership.On January 1,2017,their capital balances were as follows: Chris, Capital \ 30,000 Nicole, Capital 60,000 Dan, Capital 40,000 During 2017,Chris withdrew $10,000;Nicole,$20,000;and Dan,$15,000.Income for the partnership for 2017 was $75,000. Required If the partners agreed to allocate income equally,what was the ending balance in each of their capital accounts on December 31,2017?

With respect to the statement of cash flows,

Venture Enterprises' accountant determined the following: Where would this item be reported on Venture's financial statements? Common stock, \ 0.01 par value \ 50,000

Which of the following combinations appropriately reflects the type of accounts represented by the Treasury Stock account and the Additional Paid-In Capital-Treasury Stock account? Treasury Stock Additional Paid-In Capital—-Treasury Stock a. contra stockholders' equity stockholders' equity b. contra stockholders' equity contra stockholders' equity c. stockholders' equity stockholders' equity d. retained earnings retained earnings

On January 1,2017,Bogart Acres Company issued 10,000 shares of 10%,$20 par value cumulative preferred stock.In 2017 and 2018,no dividends were declared on preferred stock.In 2019,Bogart had a profitable year and decided to pay dividends to stockholders of both preferred and common stock.If it has $200,000 available for dividends in 2019,how much could it pay to the common stockholders?

The statement of stockholders' equity

The Stockholders' Equity section of the balance sheet for Scuba Gear Corporation appeared as follows before its recent stock dividend: Common stock, \ 5 par, 100,000 shares issued and outstanding \ 500,000 Additional paid-in capital 100,000 Retained earnings 725,000 Total stockholders' equity \ 1,325,000 Scuba Gear declared a 10% stock dividend when the market price per share was $8.After the stock dividend was distributed,the components of the stockholders' equity section were: Common Stock Additional Paid-In Capital Retained Earning a. \ 580,000 \ 100,000 \ 645,000 b. \ 550,000 \ 100,000 \ 675,000 c. \ 550,000 \ 130,000 \ 645,000 d. There would be no change in the components of stockholders' equity.

Which of the following is reported as a financing activity on the statement of cash flows?

The Stockholders' Equity section of Catanzaro,Inc.'s balance sheet on January 1,2017,appeared as follows: ? Common stock, \ 2 par, 20,000 shares issued and outstanding \ 40,000 Additional paid-in capital-common 120,000 Retained earnings Total contributed capital and retained earnings \ 460,000 Less: Cost of treasury stock (10,000 shares) Total stockholders' equity ? A) On March 1,2017 , Catanzaro resold 800 shares of treasury stock at $\$ 25$ per share. What is the effect of the March 1 transaction on the accounting equation? ? B) Why is the excess of the sales price of the 800 shares of treasury stock over the cost not reported on the income statement?

The characteristic where each partner is personally liable for the debts of the partnership is known as __________.

The issuance of stock is reported as a financing activity.

When a company declares a 2-for-1 stock split,

The balance of the $0.50 par value Common Stock account for Murdock Company was $60,000 before its recent 3-for-1 stock split.The market price of the stock was $30 per share before the stock split.What likely occurred as a result of the stock split?

What section of the statement of cash flows is related to the Stockholders' Equity section of the balance sheet? Name four different transactions that are reported in that section that relate to the statement of cash flows.

The FASB has allowed certain items to be reported directly to stockholders' equity in an effort to mitigate the possibility of income fluctuating widely from period to period.

When a company declares a cash dividend,which of the following is true?

Dali Company has 15,000 shares of stock authorized at January 1.Dali issues 4,500 shares to the stockholders during the year and then the company repurchases 1,500 shares as treasury stock.Based on this information,how many shares are outstanding at December 31?

Below are two transactions for Navaho Co. 1. On June 1, Navaho Co. issued 2,000 shares of $5 par common stock for $16 per share. 2. On June 15, Navaho Co. issued 1,200 shares of $5 par preferred stock to acquire a building. The stock is not widely traded, and the current market value of the stock is not evident. The building has recently been appraised by an independent firm as having a market value of $15,000. Required For each of these transactions, determine the impact on the accounting equation of the journal entry that Navaho Co. would make.

Tarr,a sole proprietorship,had the following balances and transactions during 2017: beginning capital,$40,000;contribution of cash to the business by the owner,$15,000;revenue,$60,000;expenses,$35,000;withdrawal by the owner,$5,000.What is the amount of the ending capital balance?

Chad Darrow,CFO of your company,is considering constructing a deal with Extreme Industries,whereby stock is issued in exchange for an asset (custom extrusion equipment valued at $400,000 by an outside appraiser).The stock to be exchanged is a new class of preferred stock that has not yet been traded in the open market.He has asked that you draft a memo to Marc Lyon,CEO,about the valuation of the asset to be used in the exchange.In your memo,address the reporting amount for the asset and how fair market value could be determined.