Exam 13: Corporations

Megastar Corporation reported the following equity section on its current balance sheet.The common stock is currently selling for $18.25 per share. Common Stock, \ 14 Par, 129,000 shares authorized, 48,000 shares issued and outstanding \ 672,000 Paid-in Capital in Excess of Par-Common 167,000 Retained Earnings 350,000 Total Stockholders' Equity \ 1,189,000 What would be the balance in the Common Stock account after the issuance of a 10% stock dividend?

A company that reports a discontinued operation must also report earnings per share for this item in the notes to the financial statements.

Atlantis Corporation has 12,000 shares of 14%,$78 par noncumulative preferred stock outstanding and 29,000 shares of no-par common stock outstanding.At the end of the current year,the corporation declares a dividend of $188,000.How is the dividend allocated between preferred and common stockholders?

An underwriter usually assumes some of the risk of issuing stock by agreeing to buy all of the stock the firm cannot sell to its clients.

In the event of a corporate liquidation,preferred stockholders ________.

Which of the following is a reason for a company to announce a stock split?

Which of the following occurs when a corporation distributes a stock dividend?

Declaring and paying dividends causes an increase in both assets and stockholders' equity of the corporation.

Cash dividends and treasury stock purchases ________.

A net loss for the year decreases the balance in Retained Earnings.

Which of the following statements regarding the price/earnings ratio is incorrect?

These independent companies had the following transactions: a.Long Corporation issued 4,500 shares of its $6 stated value common stock to Jack Smith Realty in exchange for land with a market value of $50,000 b.Short Corporation received $115,000 cash for 10,000 shares of its $10 par preferred stock c.Middle Corporation issued 7,000 shares of its no-par common stock at $15 per share Requirement: Prepare the journal entries for these transactions.Use proper account titles and omit explanations.

When 1000 shares of $3 stated value common stock is issued at $18 per share,________.

Which of the following is NOT a profitability measure that is used to compare companies of different sizes?

A memorandum entry is an entry in the journal that notes a significant event but has no debit or credit amount.

For accounting purposes,par value stock is treated the same as stated value stock except for the account names.

Preferred stock is stock ________.

A company cannot report a gain or loss when buying or selling its own stock.

If treasury stock is resold for more than cost,the difference is debited to the account Paid-In Capital from Treasury Stock Transactions.

Most corporations set par value low and issue common stock at a premium.