Exam 12: Stockholders Equity

The board of directors of Lark Corporation declared a cash dividend of $3.50 per share on 57,000 shares of common stock on June 14,20x5.The dividend is to be paid on July 15,20x5,to shareholders of record on July 1,20x5.The effects of the entry to record the declaration of the dividend on June 14,20x5,are to

On January 1,20x5,Dove Valley Corporation had 100,000 shares of $10 par value common stock issued and outstanding.All 100,000 shares had been issued in a prior period at $30 per share.On February 1,20x5,Dove Valley purchased 4,000 shares of treasury stock for $36 per share and later sold the treasury shares for $40 per share on March 2,20x5. -The entry to record the sale of the treasury shares on March 2,20x5,is :

The information that follows pertains to stockholders' equity data of the Beagle Corporation on December 31,20x5.Compute the amount of each item indicated by a letter in the listing below.Where necessary,carry answers to two decimal place.

Which of the following statements is descriptive of common stock?

Corporations are subject to less government control and regulation than are other forms of business.

When common stock with a par value is sold for a price that exceeds par value,the Common Stock account is credited for the cash proceeds received from the sale of the shares.

Cash dividends become a liability of a corporation when the stock goes ex-dividend.

Start-up and organization costs should be expensed as incurred.

A corporation's board of directors may influence dividend policies,but the company's senior management has sole authority to declare dividends.

Once an owner of convertible preferred stock has converted to common,he or she cannot convert back to preferred.

The entry required to record start-up and organization costs will cause an increase in assets.

The preparation of a statement of stockholders' equity makes which other financial statement unnecessary?

The excess of the issuance price over the stated value of a no-par common stock should be credited to the

The liability of a stockholder is usually limited to the stockholder's investment in the corporation.

Treasury stock usually is recorded at cost when purchased.

On June 1,20x5,Jomax Corporation had 60,000 shares of $10 par value common stock outstanding.On June 2,20x5,Jomax declared a 40 percent stock dividend to be distributed on July 5,20x5,to shareholders of record on June 15,20x5.What amount of retained earnings should be transferred to contributed capital because of this dividend?

Willow Corporation has retained earnings of $320,000.It has 5,000 shares of 6 percent,$100 par value preferred stock outstanding that is callable at 102.The preferred stock is cumulative,and one year of dividends is in arrears.It also has 10,000 shares of $50 par value common stock outstanding.Assume all stock is issued at par. -The book value of each share of preferred stock is

Which of the following items will not be disclosed on a statement of stockholders' equity?

In computing book value per share of common stock,common stock distributable is included in the divisor.

The entry to record the declaration of a cash dividend will