Exam 11: Stockholders Equity

Stock dividends involve the issuance of additional shares of stock.

[APPPENDIX] When an individual wishes to form a sole proprietorship,he or she does so by

Arco Corporation declared a cash dividend on June 2 of $6 per common share.The company has 2,000 shares of common stock authorized,1,000 shares issued,and 200 in the treasury.The entry to record the declaration of the cash dividend increases

If a company has both common and preferred shares outstanding and wishes to calculate book value per share,

All changes in all stockholders' equity accounts must be shown in the Stockholders' Equity section of the balance sheet.

Miramar Corporation reported the following in the stockholders' equity section of its balance sheet at December 31,2012: How many shares of stock are issued?

What is meant by the balance in the retained earnings account?

Stockholders prefer to invest in preferred stock because

On December 31,2013,Aire Dyne,Inc.reported common stock of $120,000,retained earnings of $60,000,and total stockholders' equity equal to $500,000.No unusual accounts appeared in the stockholders' equity section of its balance sheet.During the fiscal year ended December 31,2014,10,000 shares of stock were sold for $40,000,of which $10,000 represented additional paid-in capital.The company reported net income of $85,000 and declared and paid dividends of $50,000.

Use the incomplete stockholders' equity section of Tokin Company's balance sheet as of December 31,2012,to answer the following question. How many shares of common stock are outstanding?

Dividends in Arrears

Use the incomplete stockholders' equity section of Tokin Company's balance sheet as of December 31,2012,to answer the following question. What is the amount of Tokin's retained earnings?

[APPENDIX] When the owner of a sole proprietorship withdraws assets from the business for personal use

A stock split is similar to a stock dividend in that it results in additional shares of stock outstanding and is nontaxable.

Several transactions occurred for Shadow Dreams Corporation during 2012.Indicate the effect each item has directly on retained earnings by writing the amount in the space provided.Place a + (plus sign)in front of the amount if the item increases retained earnings,or ( )parentheses around the amount if the item decreases retained earnings.Place an X in the blank for items that have no direct effect on retained earnings.(Items that affect the income statement do not directly affect retained earnings. )

Comfort Shoes had the following items included in its accounting records.In the space provided,indicate whether each of the items listed is included in an account in the stockholders' equity section of the balance sheet.

Island Breeze Cafe began business on January 1,2012.The corporate charter authorized issuance of 1,000 shares of no-par value common stock,of which 200 shares were issued,and 4,000 shares of $8 par value,6% cumulative preferred stock,of which none were issued.Island Breeze sold 400 shares of common stock at $8 per share on May 1.The entry to record the issuance of the shares on May 1 will:

The stockholders' equity section of Wild Weaver's balance sheet on January 1,2012,appeared as follows: On March 1,2012,Wild Weaver reacquired 800 shares of common stock at $10 per share.Wild Weaver sold 400 of the treasury shares on November 15 for $12 per share.The entry to record the sale on November 15 would show:

The statement of stockholders' equity

On January 1,2012,Sandy Shores Company issued 10,000 shares of 10%,$20 par value cumulative preferred stock.In 2012 and 2013,no dividends were declared on preferred stock.In 2014,Sandy Shores had a profitable year and decided to pay dividends to stockholders of both preferred and common stock.If they have $200,000 available for dividends in 2014,how much could it pay to the common stockholders?