Exam 11: Stockholders Equity

The FASB has allowed certain items to be reported directly to stockholders' equity in an effort to mitigate the possibility of income fluctuating widely from period to period.

Authorized stock represents the

When a company declares a stock dividend,which of the following occurs?

[APPENDIX] A balance sheet of a sole proprietorship includes only the business assets and liabilities,not the personal assets of the owner.

Which of the following statements with regard to large stock dividends is true?

Information taken from the accounting records of Airways,Inc. ,for the year ended December 31,2012,appears in the table below.In the space provided,indicate in which section of the statement of cash flows (investing or financing)each item would be reported,and whether the item is a cash inflow or outflow.If an item is neither an investing activity or financing activity,place an X in the box.

Given below are several transactions for Vision Inc.In the space provided,indicate the impact on each of the stockholders' equity accounts given,by placing the dollar amount and either a plus sign (+)or a minus sign (-)in the box provided.For each account in which there is no effect,place an X in the box.

[APPENDIX] Tropic Vending,a sole proprietorship,had the following balances and transactions during 2013: beginning capital,$40,000;contribution of cash to the business by the owner,$15,000;revenue,$60,000;expenses,$35,000;withdrawal by the owner,$5,000.What is the amount of the ending capital balance?

The statement of stockholders' equity for Jutras Corporation shows an increase in the Common Stock account of $8,000,an increase in Additional Paid-in Capital--Common in the amount of $22,000,and an increase in Retained Earnings of $50,000.If the stock has a par value of $3 and dividends of $10,000 were declared and paid during the year,what is the amount of net income for the year?

Use the comparative financial statements of Penny Company for the year ended December 31,2012 to answer the following question(s). Penny Company Statement of Stockholder's Equity for the Year Ended December 31,2012 REQUIRED: (1)What is the primary cause of the change in Penny's stockholders' equity from January 1,2012 to December 31,2012? (2)Did Penny declare dividends during 2012? How do you know? Which items would be included as part of comprehensive income,if any?

Fashion Company reported the following: Common stock,$3 par,10,000 shares authorized,5,000 shares issued and outstanding What is the effect of a 10% stock dividend if the market price of the common stock is $30 per share when the dividend is declared?

The stockholders' equity section of the balance sheet for Front Page News Corporation appeared as follows before its recent stock dividend: Front Page declared a 10% stock dividend when the market price per share was $8. After the stock dividend was distributed, the components of the stockholders' equity section were:

Total stockholders' equity divided by the number of shares of common stock outstanding is ________________________________________.

What is the effect of a stock dividend on stockholders' equity?

If Llama Company has paid out more in dividends than it has had in net income,over the lifetime of the company,then the balances in the Stockholders' Equity should show:

Stock dividends reduce the par value of the stock.

The Treasury Stock account should be considered an asset account.

Kiwi Charters reported the following information at December 31,2013: Kiwi's total contributed capital is

Comprehensive income is the increase in net assets resulting from all transactions occurring during an accounting period except stockholders' investments and dividends.

Marvin's Shrimp Restaurant incorporated as a new business on January 1,2012.The company is authorized to issue 40,000 shares of $1 par value common stock,and 10,000 shares of 4%,$5 par value,cumulative,participating preferred stock.On January 1,2012 the company issued 15,000 shares of common stock for $8 per share.Net income for the year ended December 31,2012,was $115,000.Cash dividends in the amount of $30,000 were declared,but only $25,000 were paid as of year-end.Prepare the stockholders' equity section of the balance sheet for Marvin's Shrimp Restaurant at December 31,2012.