Exam 11: Corporations: Organization, stock Transactions, and Dividends

The Dayton Corporation began the current year with a retained earnings balance of $32,000.During the year,the company corrected an error made in the prior year,which was a failure to record depreciation expense of $3,000 on equipment.Also,during the current year,the company earned net income of $12,000 and declared cash dividends of $7,000.Compute the year end retained earnings balance.

Earnings per share

On April 10,a company acquired land in exchange for 1,000 shares of $20 par common stock with a current market price of $73.Journalize this transaction.

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

A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8.Subsequently,the company declared a 4% stock dividend on a date when the market price was $12 a share.What is the amount transferred from the Retained Earnings account to Paid-in Capital accounts as a result of the stock dividend?

A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of $150.If the corporation issues a 5-for-1 stock split,the market value of the stock after the split will be approximately:

A deficit in Retained Earnings is reported in the stockholders' equity section of the balance sheet.

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

Treasury Stock is listed in the stockholders' equity section on the balance sheet.

The liability for a dividend is recorded on which of the following dates?

For accounting purposes,stated value is treated the same way as par value.

The issuance of common stock affects both paid-in capital and retained earnings.

When a stock dividend is declared,which of the following accounts is credited?

The day on which the board of directors of the corporation distributes a dividend is called the declaration date.

A corporation has 50,000 shares of $25 par value stock outstanding.If the corporation issues a 3-for-1 stock split,the number of shares outstanding after the split will be

A company had stock outstanding as follows during each of its first three years of operations: 2,500 shares of $10,$100 par,cumulative preferred stock and 50,000 shares of $10 par common stock.The amounts distributed as dividends are presented below.Determine the total and per share dividends for each class of stock for each year by completing the schedule.

The date on which a cash dividend becomes a binding legal obligation is on the

A corporation was organized on January 1 of the current year,with an authorization of 20,000 shares of $4 preferred stock,$12 par,and 100,000 shares of $3 par common stock.

On April 10,Maranda Corporation issued for cash 11,000 shares of no-par common stock at $25.On May 5,Maranda issued at par 1,000 shares of 4%,$50 par preferred stock for cash.On May 25,Maranda issued for cash 15,000 shares of 4%,$50 par preferred stock at $55.

The financial loss that each stockholder in a corporation can incur is usually limited to the amount invested by the stockholder.