Exam 11: Reporting and Analyzing Equity

Record the following transactions of Naches Corporation in general journal form: (a) Reacquired 8,000 of its own $3 par value common stock at $20 cash per share. The stock was originally issued at $15 per share. (b) Sold 2,000 shares of the stock reacquired under part (a) at $23 cash per share. (c) Sold 3,000 shares of the stock reacquired under part (a) at $19 cash per share.

Hutter Corporation declared a $0.50 per share cash dividend on its common shares. The company has 20,000 shares authorized, 9,000 shares issued, and 8,000 shares of common stock outstanding. The journal entry to record the dividend payment is:

A stock _________________ keeps stockholder records and prepares official lists of stockholders for stockholder meetings and dividend payments.

The board of directors of a corporation:

Stock that was reacquired and is still held by the issuing corporation is called:

The least amount that the buyers of stock must contribute to the corporation or be subject to paying at a future date is called ____________________________.

All of the following statements regarding stock dividends are true except:

The Discount on Common Stock account reflects:

Avro Corporation has $875,000 in stockholders' equity and 350,000 weighted-average shares of common stock outstanding. Calculate the book value per common share.

If a corporation is authorized to issue 1,000 shares of $5 common stock, it is said to have $5,000 of stock outstanding.

A company has $200,000 of 10% noncumulative, nonparticipating, preferred stock outstanding, and $150,000 of common stock outstanding. In the company's first year of operation, no dividends were paid, but during the second year, it paid cash dividends of $25,000. Compute the dividends to be distributed to (1) preferred shares and (2) common shares.

A company issued 70 shares of $30 par value preferred stock for $4,000 cash. The journal entry to record the issuance is:

A company issued 60 shares of $100 par value common stock for $7,000 cash. The total amount of paid-in capital is:

Fetzer Company declared a $0.55 per share cash dividend. The company has 200,000 shares authorized, 190,000 shares issued, and 8,000 shares in treasury stock. The journal entry to record the dividend declaration is:

Special rights often granted to preferred stock include a preference for receiving dividends and additional voting privileges.

A corporation declared and issued a 15% stock dividend on October 1. The following information was available immediately prior to the dividend: The amount that contributed capital will increase (decrease) as a result of recording this stock dividend is:

Fetzer Company declared a $0.55 per share cash dividend. The company has 200,000 shares authorized, 190,000 shares issued, and 8,000 shares in treasury stock. The journal entry to record the payment of the dividend is:

Explain how to calculate the price-earnings ratio and describe how it is used in analysis of a company's financial condition and performance.

What is a corporation? Identify the key advantages and disadvantages of corporations.

The amount of annual cash dividends distributed to common shareholders relative to the common stock's market value is the: