Exam 13: Accounting for Corporations

A company has 1,000 shares of $50 par value, 4.5% cumulative and nonparticipating preferred stock and 10,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $1,000 in its first year of operation. The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:

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

Changes in accounting estimates are accounted for in current and future periods.

The _______________________ protects stockholders' proportional interest in a corporation by allowing them to purchase their proportional share of any common stock later issued by the corporation.

A 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:

A company was organized in January 2010 and has 2,000 shares of $100 par value, 10%, nonparticipating preferred stock outstanding and 30,000 shares of $10 par value common stock outstanding. It has declared and paid cash dividends each year as shown below. Calculate the total dividends distributed to each class of stockholder under each of the assumptions given.

No-par stock to which the directors assign a value per share is called _____________________.

Explain how to compute dividend yield and discuss how it is used in analysis of a company's financial condition.

Explain how to compute book value per share and discuss how it can be used to analyze the financial condition of a corporation.

A stock dividend decreases the market price of the company's stock.

The term restricted retained earnings refers to both statutory and contractual restrictions.

Quark Company earned $90,000 in income and paid cash dividends of $10,000 to preferred shareholders during the current year. Quark had 12,500 weighted-average shares of common stock outstanding for the year. Calculate the company's earnings per share.

Marble Corporation had the following balances in its stockholders' equity accounts at December 31, 2010: The following transactions occurred during 2011: Based on the above information, prepare a statement of stockholders' equity for 2011. Use the form below.

What is a stock split? How is a stock split different from a stock dividend?

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

The Perk's earnings per share is $3.11. Its common dividend is $0.36 per share and its stock price is $40 per share. Its dividend yield equals 0.9%. $0.36/$40 = 0.9%

A corporation had current year net income of $2,375,000. It paid preferred dividends of $80,000 cash and had 500,000 weighted-average shares of common stock outstanding. Calculate the corporation's earnings per share.

A company is authorized to issue 750,000 shares of $5 par value common stock. Prepare journal entries to record the following selected transactions that occurred during the company's first year of operations:

A company has $2,400,000 in stockholders' equity that includes 500 shares of $50 par value noncallable preferred stock outstanding and 250,000 shares of common stock outstanding. Calculate the book value per (1) preferred share, and (2) common share.

For each of the following independent transactions a through d, prepare the necessary journal entry: (a) Declared a $0.40 per share cash dividend on 200,000 shares of preferred stock outstanding. (b) Declared and distributed a 12% stock dividend on 800,000 shares of $5 par value common stock outstanding. Market price per common share on this date was $25. (c) Declared and distributed a 2-for-1 stock split on 500,000 shares of $10 par value common stock outstanding. (d) Declared and distributed a 30% stock dividend on 400,000 common shares of $5 par value common stock outstanding. Market price per common share on this date was $20.