Exam 13: Accounting for Corporations

is the annual amount of cash dividends distributed to ordinary shareholders relative to the share's market price.

A company has net income of $850,000. It has 125,000 weighted-average ordinary shares outstanding, a market value per share of $115, and a book value of $100 per share. The company's price-earnings ratio equals:

A company paid $0.48 in cash dividends per share. Its earnings per share is $4.20 and its market price per share is $30.00. Its dividend yield equals:

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

The only way that a shareholder can affect the management of a corporation is to get elected to the corporation's board of directors.

A company's shares are selling for $35 per share at year-end. This current year it paid shareholders a $2.45 per share cash dividend, reported earnings per share of $12.00, and had 750,000 ordinary shares outstanding at year-end. Calculate the company's dividend yield.

Treasury shares are classified as:

A preference share with a feature allowing preference shareholders to share with ordinary shareholders in any dividends in excess of the percent or dollar amount stated on the preference shares are called:

A company's only treasury share transactions for the current year follow: (1) 1,000 of its ordinary shares were purchased on June 1 for $40,000; (2) On July 1, it reissued 500 of these shares at $45 per share; (3) On August 1 it reissued the 500 remaining treasury shares at $38 per share. 1) Prepare the journal entries required to record these transactions. 2) Calculate the balance in Treasury Shares-Ordinary account, on September 1 assuming its beginning-year balance is zero.

A company had a beginning balance in retained earnings of $43,000. It had net income of $6,000 and paid out cash dividends of $5,625 in the current period. The ending balance in retained earnings equals:

Purchasing treasury share reduces the corporation's assets and shareholders' equity by equal amounts.

The cumulative net income and loss retained by a corporation is called ______________________ .

A preference share that the issuing corporation at its option may retire by paying a specified amount to the preference shareholders is called:

Prior to June 1, a company has never had any treasury share transactions. A company repurchased 100 shares of its ordinary shares on June 1 for $5,000. On July 1, it reissued 50 of these shares at $52 per share. On August 1, it reissued the remaining treasury shares at $49 per share. What is the balance in the Share Premium-Treasury Shares account on August 2?

A company reported shareholders' equity on January 1 of the current year as follows: Share Capital-Ordinary, $5 par value, 1,000,000 shares authorized, 600,000 shares issued; Share Premium-Ordinary, $1,025,000; Retained Earnings, $2,850,000. Prepare journal entries to record the following transactions:

Treasury share is share that has been authorized, issued, and is outstanding.

A company has $100,000 of 10% noncumulative, nonparticipating, preference shares outstanding, and $150,000 of ordinary shares 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) preference shares and (2) ordinary shares.

A company made an error in recording the 2009 purchase of computer equipment as an expense. This was discovered in 2011. The item should be reported as a prior period adjustment on the 2009 income statement.

A statement of comprehensive income is intended to show all owner changes in equity and other comprehensive income.

Explain where each of the following items should appear in the financial statements of a corporation: (1) The accounting department discovered that an entry was made last year to Prepaid Insurance instead of to Insurance Expense. The after-tax effect of the charge to Prepaid Insurance was $11,000. (2) The company bought a piece of land 5 years ago for $200,000 and did not depreciate the land. This year is the first time that it revalues the land to $300,000.