Exam 13: Corporations

The following information is from the December 31,2018 balance sheet of May Corporation. Preferred Stock, \ 100 par \ 390,000 Paid-In Capital in Excess of Par-Preferred 25,000 Common Stock, \ 1 par 152,000 Paid-In Capital in Excess of Par-Common 346,000 Retained Earnings \ 3,900 Total Stockholders' Equity \ 996,900 What was the total paid-in capital as of December 31,2018?

Perkins Services reported the following balances: December 31,2018 December 31,2017 Net Income \ 45,000 \ 42,000 Preferred Dividends 5,000 3,000 Total Stockholders' Equity 375,000 368,000 Total Stockholders' Equity attributable to Preferred Stock 40,000 24,000 Number of Common Shares Outstanding 16,000 12,000 Compute earnings per share for 2018,price/earnings ratio for 2018,assuming the market price on December 31,2018 is $37.50 per share,and the rate of return on common stockholders' equity for 2018. (Show your computations and round to two decimal places.)

Preferred Stock is included in the long-term assets section of the balance sheet.

Bentley Corporation received cash from issuing 17,000 shares of common stock at par on January 1,2018.The stock has a par value of $0.05 per share.Which is the correct journal entry to record this transaction?

On December 1,2019,Murphy,Inc.had 35,000 shares of $7 par value common stock issued and outstanding.The next day it declared a 50% stock dividend.The market value of the stock on that date was $15 per share.Which of the following is the correct journal entry to record this transaction?

The purchase of treasury stock ________.

Paid-in capital and retained earnings are internally generated equity.

Marketsite,Inc.completed the following treasury stock transactions in 2018: June. 3 Purchased 2,000 shares of the company's $\$ 5$ par value common stock as treasury stock, paying cash of $\$ 15$ per share. June 14 Sold 800 shares of the treasury stock for cash of $\$ 20$ per share. Journalize these transactions.Explanations are not required. How will Marketsite,Inc.report treasury stock on its balance sheet as of December 31,2018?

Foodmart,Inc.completed the following treasury stock transactions in 2018: Mar. 3 Rurchased 1,Bed shares of the company's $\$ 3$ par value common stock as treasury stock, paying cash of $\$ 10$ per share. Mar. 17 Sold 400 shares of the treasury stock for cash of $\$ 12$ per share. Mar. 25 Sold 600 shares of the treasury stock for cash of $\$ 7$ per share. (Assume the balance in Paid-In Capital from Treasury Stock Transactions on March 24 is $ 1,200.) Journalize these transactions.Explanations are not required. How will Foodmart,Inc.report treasury stock on its balance sheet as of December 31,2018?

Usually,the issue price exceeds par value because par value is normally set as a percentage of the issue price of the stock.

Which of the following occurs when a cash dividend is declared?

Home Gallery,Inc.had beginning retained earnings of $125,000 on January 1,2019.During the year,Home Gallery declared and paid $40,000 of cash dividends and earned $55,000 of net income.Prepare a statement of retained earnings for Home Gallery,Inc.for the year ending December 31,2019.

To compare companies of different sizes,investors need some standard profitability ratios.

Stock dividends have no effect on the total amount of stockholders' equity.

Interest revenue and interest expense are not included in the calculation of income from continuing operations.

Valley,Inc.has 9000 shares of preferred stock outstanding.The preferred stock has a $90 par value,a 14% dividend rate,and is noncumulative.If Valley has sufficient funds to pay dividends,what is the total amount of dividends that will be paid out to preferred stockholders?

Which of the following is NOT included in income from continuing operations?

Treasury stock ________.

A corporation is a separate legal entity that is organized independently of its owners.

Which of the following statements is TRUE?