Exam 13: Accounting for Corporations

If Grant Corporation has 120,000 shares of common stock authorized,75,000 shares of common stock issued,and holds 3,000 shares of common stock as treasury stock,the total number of outstanding shares of Grant Corporation amounts to

When common stock is issued by a corporation for a cash price above par value,the excess of the cash proceeds over the par value should be reported in the financial statements as a component of

How is book value per share interpreted for an investor who owns one share of a company's stock? Is book value equal to the amount this stockholder would receive if the company were sold or liquidated? Why or why not?

Stock options often are granted by a corporation to management personnel as a means of additional compensation and motivation of these employees.

The par value of the common stock represents the

The account Common Stock Distributable is classified as a current liability.

A stock dividend will cause a decrease in the total number of shares issued and outstanding.

Cielo Corporation had net income of $740,000 in 20x4 and $830,000 in 20x5.Total stockholders' equity at the end of 20x4 was $1,250,000 and total stockholders' equity at the end of 20x5 was $1,500,000.Cielo's total assets at the end of 20x4 were $2,210,000 and its total assets at the end of 20x5 were $2,860,000.Based on this information,what is Cielo's return on equity for 20x5?

Par value

Which of the following is not true about a 35 percent stock dividend?

Financing a business with common stock is more risky than financing it with bonds.

Adobe Corporation had net income of $120,000 in 20x4 and $164,000 in 20x5.Total stockholders' equity at the end of 20x4 was $760,000 and total stockholders' equity at the end of 20x5 was $820,000.Adobe's total assets at the end of 20x4 were $1,320,000 and its total assets at the end of 20x5 were $1,410,000.Based on this information,what is Adobe's return on equity for 20x5?

Legal capital is a descriptive phrase for

When stock is issued for noncash assets or services,how does one place a valuation (dollar amount)on the transaction?

The following information relates to the number of common shares of the Jackson Corporation: 60,000 Authorized shares 25,000 Unissued shares 3,500 Treasury shares Calculate the number of outstanding shares from the information given.Show your calculations.

A corporation should account for the declaration of a 10 percent stock dividend by

Although a corporation may have sufficient cash and retained earnings to pay a dividend,its board of directors may not declare dividends.Name at least two reasons why a board of directors might not declare dividends.

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 common stock is

Use the following information to answer the question below. When Langston Corporation was formed on January 1,20x5,the corporate charter provided for 50,000 shares of $20 par value common stock.The following transactions were among those engaged in by the corporation during its first month of operation: 1. The corporation issued 200 shares of stock to its lawyer in full payment of the $5,000 bill for assisting the company in drawing up its articles of incorporation and filing the proper papers with the state agency. 2. The company issued 8,000 shares of stock at a price of $25 per share. 3. The company issued 8,000 shares of stock in exchange for equipment that had a fair market value of $160,000. The entry to record transaction 3 is: