Exam 13: Equity Financing

The Rand Company wants to raise additional equity capital.The company decides to issue 5,000 shares of $25 par preferred stock with detachable warrants.The package of the stock and warrants sells for $105.Each warrant enables the holder to purchase two shares of $10 par common stock at $30 per share.Immediately following the issuance of the stock,the stock warrants are selling at $14 each.The market value of the preferred stock without the warrants is $96.

Cash dividends on the $10 par value common stock of Harland Company were as follows: What was the effect on Harland's stockholders' equity accounts as a result of the 2014 dividend transactions? Additional Common Stock Paid-In Capital Retained Earnings

Upon organization on January 1,2014,Cuke Inc.was authorized to issue 200,000 shares of $10 par common stock in multiples of 100 shares.During 2014,110,000 shares were sold at $65 per share;6,000 shares were later reacquired as treasury stock at $72 per share.A stock split of 2-for-1 on all issued shares was approved on December 31,2014. Provide the entries to record the declaration and payment of the dividends on December 4,2015.

The entry to record the issuance of common stock for fully paid stock subscriptions is

Indigo Co.was organized on January 2,2014,with the following capital structure: Indigo's net income for the year ended December 31,2014,was $750,000,but no dividends were declared.Indigo's balance sheet would report Dividends Payable at December 31,2014,of

On January 1,2014,the records of the Marathon Corporation showed these balances: During 2014 and 2015,these transactions occurred: Provide the entries to record the declaration and payment of the stock dividends during 2014 and 2015.

On November 10,Linden Co.split its stock 5-for-2 when the market value was $55 per share.Prior to the split,Linden had 300,000 shares of $15 par value stock.After the split,the par value of the stock was

On December 10,Vandalia Co.split its stock 5-for-2 when the market value was $49 per share.Prior to the split,Vandalia had 250,000 shares of $15 par value stock.After the split,Vandalia's outstanding shares would be

When a portion of stockholders' original investment is returned in the form of a dividend,it is called a

On March 2,2014,Burton Corporation issued 4,000 shares of 6 percent cumulative $100 par value preferred stock for $434,000.Each preferred share carried one nondetachable stock warrant which entitled the holder to acquire,at $17,one share of Burton $10 par common stock.On March 2,2014,the market price of the preferred stock (without warrants)was $90 per share and the market price of the stock warrants was $15 per warrant.The amount credited to Paid-In Capital in Excess of Par-Preferred by Burton on the issuance of the stock was

Which of the following features of preferred stock would most likely be opposed by common shareholders?

The issuance of shares of preferred stock to shareholders

Porter Corporation holds 10,000 shares of its $10 par common stock as treasury stock,which was purchased in 2013 at a cost of $140,000.On December 10,2014,Porter sold all 10,000 shares for $260,000.Assuming that Porter used the cost method of accounting for treasury stock,this sale would result in a credit to

The following amounts were taken from the income statement of Tarpon Springs Company for the year ending December 31,2014: Income from discontinued operations: In addition,Tarpon Springs reported the following items (all items are before taxes): The tax rate on all items is 40%. -Prepare a statement of comprehensive income in a two-statement format.

Which of the following is an appropriate presentation of treasury stock?

Taylor Company paid cash dividends totaling $150,000 in 2012 and $75,000 in 2013.In 2014,Taylor intends to pay cash dividends of $800,000.Compute the amount of cash dividends per share to be received by common stockholders in 2014 under each of the following assumptions.Treat each case independently.There were no dividends in arrears as of January 1,2012.

The following data are extracted from the stockholders' equity section of the balance sheet of Guthrie Corporation: During 2014,the corporation declared and paid cash dividends of $7,500 and also declared and issued a stock dividend.There were no other changes in stock issued and outstanding during 2014.Net income for 2014 was

During 2014,the following transactions related to the capital stock of the Landline Corp.occurred: Provide the entries to record the above transactions.

On August 1,2014,B.Amherst Company reacquired 4,000 shares of its $15 par value common stock for $18 per share.Amherst uses the cost method to account for treasury stock.What journal entry should Amherst make to record the acquisition of treasury stock?

The par value of common stock represents the