Exam 13: Accounting for Corporations

A cumulative preference share has a right to be paid both current and prior periods' unpaid dividends before any dividend is paid to ordinary shareholders.

Identify and describe the two main components of shareholders' equity.

Dividend yield is the percent of cash dividends paid to ordinary shareholders relative to the:

Record the following transactions of a company in general journal form: (a) Reacquired 8,000 of its own $10 par value ordinary shares at $40 cash per share. The share was originally issued at $15 per share. (b) Sold 2,000 shares of those reacquired under part (a) at $43 cash per share. (c) Sold 3,000 shares of those reacquired under part (a) at $39 cash per share.

A company had the following shareholders' equity on January 1: On January 10, the company declared a 40% bonus issue or share dividend to holders of record on January 25, to be distributed January 31. The market value of the share on January 10 prior to the dividend was $20 per share. What is the book value per ordinary share on February 1?

On July 31, a company declared a cash dividend of $0.25 per ordinary share to the shareholders of record on August 15. The cash dividend will be paid on August 25. This company has 500,000 shares authorized and 100,000 shares outstanding. Prepare the journal entries required on July 31, August 15 and August 25.

Dividend yield is computed by dividing annual cash dividends per share by the market value per share.

A company reported the following shareholders' equity on January 1 of the current year: Prepare journal entries for the following selected transactions related to this company's shares during the current year:

Paid-in capital is the total amount of cash and other assets the corporation receives from its shareholders in exchange for its shares.

Recording of a bonus issue or share dividend does not result in a liability being recorded.