Exam 13: Accounting for Corporations

Which of the following has an effect on total stockholders' equity?

A dividend that represents a return to the stockholders of a part of their paid-in capital rather than a distribution out of retained earnings is called a liquidating dividend.

The entry to record the declaration of a cash dividend will

a.Yorkshire Corporation has 9,000 shares of $10 par value common stock and 5,000 shares of $50 par value,10 percent cumulative preferred stock outstanding.All shares were issued at par value.In addition,retained earnings total $90,000.If the preferred stock is callable at $54 per share,and one year's dividends are in arrears,compute book value per share of preferred stock. b.Assume the same facts as in a above.Calculate book value per share of common stock. c.Assume the same facts as in a above and that Yorkshire Corporation declares a 5-for-1 stock split on its common stock.After the split,total par value of common stock equals what amount? d.Assume the same facts as in a above and that Yorkshire Corporation declares a 12 percent stock dividend on its preferred stock.If the market value on the declaration date was $70 per share,for what amount will Preferred Stock Distributable be credited?

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?

The following facts pertain to the stockholders' equity section of the balance sheet of Avenida Corporation: During 20x5,Avenida declared and distributed a stock dividend.Also during 20x5,Avenida declared and paid cash dividends of $17,000.There were no changes in the number of shares of stock issued and outstanding during the period except for the change caused by the stock dividend.Calculate the amount of net income reported by Avenida for 20x5.

Treasury shares plus outstanding shares equal

Use the following information to obtain the ratios requested below.Where necessary,carry answers to one decimal place. Dividends per share: $1.14 Market price per share: $54 Net income: $118,000 Stockholders' equity,beginning of year: $500,000 Stockholders' equity,end of year: $530,000 Earnings per share: $1.75 a.Dividends yield = _____________% b.Return on equity = _____________% c.Price/earnings (P/E)ratio = __________ times

Start-up and organization costs for a corporation that is to operate a retail store would include the costs of

All of the following would appear on the statement of stockholders' equity except

Dividends yield equals

The sale of treasury stock at an amount less than cost results in a loss to be reported on the income statement.

Corporate earnings are subject to double taxation.

A small stock dividend normally results in a transfer from Retained Earnings to Contributed Capital of an amount equal to the market value of the stock.

Holders of preferred stock normally do not have

When stock is issued for noncash assets or services,the dollar amount to be recorded for this exchange is determined by the

The following amounts were reported by Paloma Corporation on December 31,20x4 : On January 3,20x5 ,5,000 shares of treasury stock were sold.After the sale of the treasury shares,total stockholders' equity amounted to $277,500.No stockholders' equity transactions other than the sale of the treasury stock occurred between December 31,20x4 ,and January 3,20x5.From the information given,compute the selling price per share of the treasury stock.

The book value of one share of callable preferred stock is equal to the call value of the preferred share minus any dividends in arrears.

Use the following information to answer the question below. When Langston Corporation was formed on January 1,20x5,the corporate charter provided for 100,000 shares of $10 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 400 shares of stock to its lawyer in full payment of the $10,000 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 16,000 shares of stock at a price of $50 per share. 3)The company issued 14,000 shares of stock in exchange for equipment that had a fair market value of $320,000. -The entry to record transaction 2 is

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