Exam 11: Stockholders Equity

Manatee Company Manatee Company was incorporated as a new business on January 1,2012.The company is authorized to issue 20,000 shares of $5 par value common stock and 10,000 shares of 6%,$10 par value,cumulative,participating preferred stock.On January 1,2012,the company issued 8,000 shares of common stock for $15 per share and 2,000 shares of preferred stock for $30 per share.Net income for the year ended December 31,2012,was $375,000. Refer to the information about Manatee Company. The amount of Manatee's total contributed capital at December 31,2012,is

[APPENDIX] What are the advantages of organizing a company as a corporation instead of a partnership or sole proprietorship?

A 2-for-1 stock split increases the par value per share.

What is the difference between book value and market value of stock?

Which of the following is an account in stockholders' equity?

The maximum number of shares a company may issue are ______________________________.

Fairchild Company acquired a building valued at $210,000 for property tax purposes in exchange for 6,000 shares of its $10 par common stock.The stock is widely traded and selling for $31 per share.At what amount should the building be recorded by Fairchild Company?

The balance of the $0.50 par value Common Stock account for Murdock Company was $60,000 before its recent 3-for-1 stock split.The market price of the stock was $30 per share before the stock split.What occurred as a result of the stock split?

Which of the following should be considered when a company decides to declare a cash dividend on common stock?

Many firms operate at a dividend payout ratio of less than 50%.Why don't firms pay a larger percentage of income as dividends?

Eau Company began operations on March 1,2012.The corporate charter authorized issuance of 3,000 shares of $2 par value common stock.Eau sold all of the stock on March 1.On May 1,Eau repurchased 2,000 of the outstanding shares.On May 14,Eau sold 1,200 of the treasury shares.On June 1,Eau declared a 2-for-1 stock split.As a result of the split,what occurred?

[APPENDIX] Explain the differences between a partnership and sole proprietorship.Include in your discussion whether either is considered a separate legal entity.

With regard to a corporation's stock,par value is

Stock issued by the firm,but then repurchased and not retired is ________________________.

The Retained Earnings account balance for a large corporation is $10,000,000.This amount represents

CarWorks Company has 100,000 authorized shares of $4 par common stock.The company issued 40,000 shares at $8.Subsequently,CarWorks declared a 2% stock dividend on a date when the market price was $11 a share.What is the amount transferred from the retained earnings account to paid-in capital accounts as a result of the stock dividend?

Roehr Corporation issues 20,000 shares of $0.50 par common stock for $6 per share;the Additional Paid-in Capital--Common account will increase by

The characteristic where each partner is personally liable for the debts of the partnership is known as _____________________.

Contrast the two parts of stockholders' equity.

With respect to the statement of cash flows,