Exam 11: Stockholders Equity: Paid-In Capital

Financial reporting of and retained earnings The 2015 annual report of Kirtland Products disclosed net income of approximately $87 million for the fiscal year ending March 31,2015,and retained earnings of approximately $485 million as of March 31,2015. (a)Which financial statement shows computation of net income? (b)Which financial statement includes the retained earnings figure of $485 million? (c)Explain why Kirtland reports $87 million as net income,but a much larger amount,$485 million,as retained earnings.

When treasury stock is reissued at a price above cost:

When a corporation issues capital stock,most state laws require the corporation to credit Retained Earnings for the par value of shares of stock issued.

A 2-for-1 stock split will have what effect upon the following items?

On January 1,2015,Aili Corporation issued 60,000 shares of its total 200,000 authorized shares of $4 par value common stock for $18 per share.On December 31,2015,Aili Corporation's common stock is trading at $32 per share.Assume Aili Corporation decides to issue an additional 10,000 shares of its common stock on December 31,2015.How will the above increase in value affect Aili?

Authorization of a stock issue creates an asset on the books of the issuing corporation.

The purchase of treasury stock for cash causes no change in total assets.

To be consistent with international standards,the FASB has changed reporting requirements for redeemable p

The ownership of common stock in a corporation usually carries the following rights:

Preferred stockholders generally do not have the same voting rights as do common stockholders in a corporation.

The rights of a common stockholder do not include the right:

The entry to record the issuance of common stock at a price above its par value includes:

Which statement is true about a stock split?

Stockholders in a corporation elect the board of directors,pass the bylaws of the corporation,and hire top corporate officers and managers.

An underwriter is a bank or trust company that maintains a corporation's stockholder records.

When shares of stock are sold from one investor to another,they will trade at:

Which of the following is not a characteristic of most p

Which of the following best describes the book value of a share of stock?

The purchase of treasury stock creates an asset for the corporation and is recorded at the cost of the shares purchased.

When no-par stock is issued,the entire proceeds are credited to Capital Stock and this amount is viewed as legal capital not subject to withdrawal.