Exam 12: Corporations: Organization, stock Transactions, and Dividends

A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9.Subsequently,the company declared a 2% stock dividend on a date when the market price was $10 a share.The effect of the declaration and issuance of the stock dividend is to

A restriction / appropriation of retained earnings establishes cash assets that are set aside for a specific purpose.

The entry to record the issuance of common stock at a price above par includes a debit to

Prepare entries to record the following:

Using the following accounts and balances,prepare the stockholders' equity section of the balance sheet.Fifty thousand shares of common stock are authorized,and 5,000 shares have been reacquired.

The reduction in the par or stated value of common stock,accompanied by the issuance of a proportionate number of additional shares,is called a stock split.

The net increase or decrease in Retained Earnings for a period is recorded by closing entries.

A reduction of par or stated value of stock results from a

Double taxation is a disadvantage of a corporation because the corporation has to pay income taxes at twice the rate applied to partnerships.

Which of the following would appear as a prior period adjustment?

Earnings per share

On February 13,Epperson Company issue for cash 75,000 shares of no-par common stock (with a stated value of $125)at $140.On September 9,Epperson issued at par 15,000 shares of 1%,$60 par preferred stock at par for cash.On November 23,Epperson issued for cash 8,000 shares of 1%,$60 par preferred stock at $70. ​ Journalize the entries to record the February 13,September 9,and November 23 transactions.

Paid-in capital may originate from real estate transactions.

The retained earnings statement may be combined with the income statement.

If the dividend amount of preferred stock,$50 par value,is quoted as 8%,then the dividends per share would be $4.

A corporation,which had 18,000 shares of common stock outstanding,declared a 3-for-1 stock split.

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 30,000 shares were originally issued and 5,000 were subsequently reacquired.What is the number of shares outstanding?

Under the Internal Revenue Code,corporations are required to pay federal income taxes.

The state charter allows a corporation to issue only a certain number of shares of each class of stock.This amount of stock is called

Firefly,Inc.reported the following results for the year ending July 31: ​ ​ Prepare a retained earnings statement for the fiscal year ended July 31.