Exam 11: Stockholders Equity: Paid-In Capital

[The following information applies to the questions displayed below.] Vision Corporation has the following information on its financial statement: -If Vision did not pay a dividend for the last two years,but declared a dividend this year,how much will they have to declare in order for the common stockholders to receive $0.45 per share?

On September 1,2018,Miami Corporation's common stock was selling at a market price of $25 per share.On that date,Miami announced a 1-for-4 stock split.At what price would you expect the stock to trade immediately after the split goes into effect?

Cumulative preferred stock means the stock is entitled to its regular dividend plus an additional share of the total amount of declared dividends.

Prepare a stockholders' equity section When Haven Corporation was incorporated in 2016,authorization was obtained to issue 200,000 shares of $5 par value common stock and 6,000 shares of 8% cumulative preferred stock.The preferred stock has a par value of $100.All the preferred stock was issued at $107 per share,and 110,000 shares of the common stock were sold for $9 per share.The operations of the company resulted in a net loss of $19,000 in 2016 and net income of $125,000 in 2017.In 2018,net income was $352,000,and the cash position was sufficient to allow the board of directors to declare a cash dividend of $1 per share to the common shareholders,as well as satisfy all preferred stock dividend requirements. Complete in good form the stockholders' equity section of Haven Corporation's balance sheet at December 31,2018.(Hint: First determine the total amount of dividends declared in 2018. )

Financial reporting of net losses and retained earnings A recent annual report of Dobbs,Inc. ,reported a net loss of approximately $63 million and retained earnings of approximately $1.6 billion. (a)Which financial statement shows computation of the $63 million net loss? (b)Which financial statement includes the retained earnings figure of $1.6 billion? (c)Explain how it is possible for Dobbs to report both a net loss of $63 million and retained earnings of $1.6 billion in a single set of financial statements.

Book value per share of preferred stock is computed as total stockholders' equity less the amount assigned to common stock plus any dividends in arrears divided by the number of shares of preferred stock outstanding.

Which of the following best describes retained earnings?

The relationship between book value and market price of capital stock is a measure of investors' confidence in a company's management.

In the Stockholders' Equity section of a balance sheet,par value of common stock is presented first,followed by par value of preferred stock,followed by additional paid-in capital on common stock,followed by additional paid-in capital on preferred stock.

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

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

When a stockholder sends in a proxy statement to a corporation he or she owns stock in,they grant management the voting rights associated with their shares.

Interpreting the stockholders' equity section The stockholders' equity section of the balance sheet of Benson Corporation (with certain details omitted)appears below: Answer the following questions based on the stockholders' equity section given above. (a)What is the total amount of legal capital? (b)What is the total amount of dividends paid annually to the preferred stockholders? (c)What is the average issue price of a share of common stock? (d)The balance in retained earnings at the beginning of the current year was $575,000,and there were no dividends in arrears.Net income for the current year was $360,000.What is the amount of the dividends declared on each share of common stock during the current year?

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.

Treasury stock is stock of a corporation that has been issued and then reacquired and then cancelled.

Interest rates impact the market value of common stock more than they impact the market value of preferred stock.

If Amelia decided to purchase 20,000 shares of its common stock to be used for future stock option plans at $11.40 per share,what journal entry would the company make?

Stockholders' equity section of a balance sheet Shown below are selected account balances from the accounting records of Hyde Corporation at December 31,2018: Complete the stockholders' equity section using the data provided above:

The additional paid-in capital account represents profit to the corporation and,as such,it is credited to Retained Earnings.

[The following information applies to the questions displayed below.] On April 1,2018,Jetter Corporation reacquired 2,000 shares of its own $10 par stock for $120,000 cash.On October 15,2018,600 of the treasury shares were reissued at a price of $65 per share. -The reacquisition of the 2,000 shares on April 1,2018,causes: