Exam 12: Income and Changes in Retained Earnings

Retained earnings At the beginning of 2015,Falcon Corporation had 2 million shares of $2 par value common stock outstanding and retained earnings of $17 million.During 2015,Falcon earned $12 million,declared a 5% stock dividend when the price of the stock was $19 per share,and paid a year-end cash dividend of $2.50 per share.(The cash dividend was declared after the stock dividend had been distributed.)At the end of 2015,what are the company's retained earnings?

When a corporation presents both "basic" and "diluted" earnings per share,basic earnings per share will be the smaller of the two figures.

On January 1,2015,Carleton Corporation had 55,000 shares of $6 par value common stock outstanding.On March 31,2015,Carleton issued an additional 10,000 shares in exchange for a building.What number of shares will be used in the computation of earnings per share for the year 2015?

Colfax Corporation's financial statements for the current year include the following: On the basis of this information,net income for the current year is:

Earnings per share-basic and diluted Stainless Corporation had net income of $7,800,000 in 2015.The company had 500,000 shares of $4 par value common stock and 70,000 shares of 8%,$100 par,p

Stock dividends and stock splits do not cause a change in the total amount of stockholders' equity.

Prior period adjustments are shown in the financial statements by adjusting the beginning balance of retained earnings in the statement of retained earnings.

A company had 240,000 shares of common stock outstanding on January 1 and then sold 60,000 additional shares on April 30.Net income for the year was $426,750.What are earnings per share?

Declaration and distribution of a stock dividend cause each of the following effects except:

A restriction of retained earnings:

In order to receive a dividend,a stockholder must have owned the stock as of the declaration date.

At the beginning of the current year,Elite Corporation had 200,000 shares of $1 par common stock outstanding and had retained earnings of $4,800,000.During the year,the company earned $1,675,000,declared a 10% stock dividend when the price of stock was $28 per share,and paid a year-end cash dividend of $3 per share.(The cash dividend was paid after the stock dividend had been distributed.)What was Elite Corporation's retained earnings at the end of the year?

Stock dividend and treasury stock At the beginning of the current year,King Cole,Inc.had 300,000 shares of capital stock outstanding and total stockholders' equity of $1,200,000.During the year,the company earned net income of $325,000,declared cash dividends of $150,000,distributed a 5% stock dividend of 15,000 shares when the market price of the stock was $16 per share,and purchased 3,000 shares of treasury stock at a cost of $13 per share.Compute the following at the end of the current year: (a)Total stockholders' equity: (b)Number of shares of stock outstanding: (c)Book value per share:

Accounting terminology Listed below are nine technical accounting terms introduced in this chapter: Each of the following statements may (or may not)describe one of these technical terms.In the space provided beside each statement,indicate the accounting term described,or answer "None" if the statement does not correctly describe any of the terms. ____ (a)A financial statement showing the revenue,expenses,and net earnings of a corporation during the current accounting period. ____ (b)A distribution of cash to stockholders. ____ (c)A distribution to stockholders of additional shares of stock,accompanied by a proportionate reduction in the par value per share. ____ (d)The market price of a share of p

Income statement and earnings per share Shown below is information relating to operations of Laconia,Inc.,for 2015: In the space provided,complete the income statement for Laconia,Inc.,including earnings-per-share figures.Laconia has 100,000 shares of a single class of common stock outstanding throughout the year.

A prior period adjustment is a correction made to:

A prior period adjustment appears in:

A 2-for-1 stock split:

MRB Company purchased 1,000 shares of its own outstanding $12 par value common stock for $16 per share and then sold 400 shares six months later for $19 a share.Prepare the journal entries for the purchase of the stock and for the sale.

When a company reports both diluted earnings per share and basic earnings per share: