Exam 13: Corporations

The price/earnings ratio is the ratio of the earnings per share of common stock to the market price of a share of the common stock.

A corporation originally issued $7 par value common stock for $13 per share.It purchased the stock for $17 per share.Which of the following is included in the entry to record the sale of 20 shares of treasury stock for $18 per share?

May,Inc.had the following transactions in 2019,its first year of operations: • Issued 20,000 shares of common stock.The stock has a par value of $3.00 per share and was issued at $19.00 per share. • Issued 2000 shares of $200 par value preferred stock at par. • Earned net income of $40,000. • Paid no dividends. At the end of 2019,what is the total amount of paid-in capital?

Companies usually report their retained earnings restrictions on the balance sheet.

Small stock dividends increase the Paid-In Capital in Excess of Par account.

Which of the following actions will decrease the amount of Total Stockholders' Equity?

Cash dividends cause a decrease in both assets and stockholders' equity of the corporation.

Restrictions on retained earnings are ________.

Nice International originally issued 105,000 shares of common stock at a price of $22 per share.A year later,it distributed a 12% stock dividend to shareholders.At the time of the stock dividend,the share price had increased to $27 per share.Which of the following statements is TRUE?

Hometown Grocery,Inc.has 41,000 shares of common stock outstanding and 5000 shares of preferred stock outstanding.The common stock is $6.00 par value; the preferred stock is 4% noncumulative with a $100.00 par value.On October 15,2018,the company declares a total dividend payment of $55,000.What is the amount of dividend that will be paid for each share of common stock? (Round your answer to the nearest cent.)

The two basic sources of stockholders' equity are ________.

Which of the following is a TRUE statement?

On June 30,2018,Samuel,Inc.showed the following data on the equity section of their balance sheet: Stockholders' equity Common stock, \ 1 par; 199,000 shares authorized, 157,000 shares issued and outstanding \ 157,000 Paid-In Capital in Excess of Par-Common \ 262,000 Retained Earnings \ 957,000 Total Stockholder's Equity \ 1,376,000 On July 1,2018,the company declared and distributed a 6% stock dividend.The market value of the stock at that time was $14 per share.Following this transaction,what is total stockholders' equity?

Cash dividends and stock splits decrease the Retained Earnings account.

Earnings per share for income from continuing operations must be reported on the face of the income statement.

Charter Schools,Inc.is authorized to issue 500,000 shares of $2 par common stock.The company issued 106,000 shares at $6 per share.When the market price of common stock was $10 per share,Charter declared and distributed a 10% stock dividend.Later,Charter declared and paid a $0.10 per share cash dividend. Prepare the journal entries to record these transactions.Explanations are not required.

Organic Produce,Inc.has 49,000 shares of common stock outstanding and 6000 shares of preferred stock outstanding.The common stock is $0.08 par value; the preferred stock is 4% noncumulative with a $100.00 par value.On October 15,2019,the company declares a total dividend payment of $56,000.How much dividend will be paid to the preferred stockholders?

A small stock dividend,a large stock dividend and a stock split have no effect on total assets.

Healthy Farmer,Inc.has 46,000 shares of common stock outstanding and 3000 shares of preferred stock outstanding.The common stock is $0.03 par value; the preferred stock is 7% noncumulative with a $100.00 par value.On October 15,2019,the company declares a total dividend payment of $43,000.What is the total amount of dividends that will be paid to the common stockholders?

Stock dividends are distributed to stockholders in proportion to the number of shares that stockholders already own.