Exam 13: Accounting for Corporations

The board of directors of Meadow Corporation declared a cash dividend on January 18,20x5 ,to be paid on February 18,20x5 ,to shareholders holding the stock on February 2,20x5 .Given these facts,the date February 2,20x5 ,is referred to as the

Treasury shares plus outstanding shares equal

When the date of declaration and the payment date occur in the same period,the amount of dividends shown on the statement of stockholders' equity and on the statement of cash flows will be equal.

The entry to record the retirement of treasury stock will include a debit to Common Stock for the par value of the retired shares.

The number of shares of issued stock equals

Dividends yield equals

Which of the following is a correct statement relating to the concept of mutual agency and the corporate form of business?

How will the declaration and distribution of a 10 percent stock dividend affect the issuing corporation's balance of retained earnings and total stockholders' equity,respectively?

a.Marco Corporation has 6,000 shares of $100 par value,8 percent cumulative preferred stock and 10,000 shares of $50 par value common stock outstanding.All shares were issued at par value.In addition,retained earnings total $198,000.If the preferred stock is callable at $105 per share and one year's dividends are in arrears,compute book value per share of preferred stock. b.Assume the same facts as in a above.Calculate book value per share of common stock. c.Assume the same facts as in a above and that Marco Corporation declares a 15 percent stock dividend on its common stock.If the market value on the declaration date was $60 per share,for what amount will Additional Paid-in Capital,Common be credited? d.Assume the same facts as in a above and that Marco Corporation declares a 4-for-1 stock split on its preferred stock.After the split,total par value of preferred stock equals what amount?

Use the following information to obtain the ratios requested below.Where necessary,carry answers to one decimal place. Dividends per share: $2.16 Market price per share: $48 Net income: $88,000 Average stockholders' equity: $625,000 Earnings per share: $1.56 a.Dividends yield = _____________% b.Return on equity = _____________% c.Price/earnings (P/E)ratio = __________times

A stock dividend will cause a decrease in the total number of shares issued and outstanding.

Firehawk Corporation had net income of $560,000 in 20x5 and paid dividends of $440,000 on 200,000 shares of outstanding common stock.Total stockholders' equity at the end of 20x5 was $2,060,000 and the market price for each share of Firehawk's stock was $58 throughout 20x5.Based on this information,what is the price/earnings ratio for Firehawk's stock?

A stock dividend is a pro rata distribution of cash to a corporation's stockholders.

Which of the following is the appropriate entry to record the declaration of cash dividends?

For accounting purposes,stated value is treated the same way as par value.

One advantage of a corporation is the lack of mutual agency.

To evaluate the amount of dividends they receive,investors use the ratio called

The sale of treasury stock at an amount less than cost results in a loss to be reported on the income statement.

Dividends in arrears must be paid when a corporation calls in its preferred stock.