Question 1

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends: Year 1:
$10,000
Year 2:
45,000
Year 3:
90,000
Determine the dividends per share for preferred and common stock for the second year.

Accepted Answer

A)  $2.25 and $0.00 
B)  $2.25 and $0.45 
C)  $0.00 and $0.45 
D)  $2.00 and $0.45

Question 2

The issuance of common stock affects both paid-in capital and retained earnings.

Accepted Answer

A) True 
 B)False

Question 3

The declaration and issuance of a stock dividend does not affect the total amount of a corporation's assets, liabilities, or stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A)  Retained Earnings Cash 
B)  Cash Dividends Payable Cash 
C)  Paid­In Capital Cash Dividends Payable 
D)  Cash Dividends Cash Dividends Payable

Question 5

For the current year ended, ABC had the following transactions:
- Issued 10,000 shares of $2.00 par value common stock for $12.00 per share.
- Issued 3,000 shares of $50 par value 6% preferred stock for $70 per share.
- Purchased 1,000 shares of previously issued common stock for $15.00 per share.
- Reported net income of $200,000.
- Declared and paid a total dividend of $40,000.
Assume that retained earnings had a beginning balance of $75,000.

-$100,000

Accepted Answer

A)  Treasury stock 
B)  Retained earnings 
C)  Preferred stock 
D)  Excess of issue price over par preferred) 
E) Common stock
F) Total paid-in capital
G) Excess of issue price over par common)h. Total stockholders' equity

Question 6

How is treasury stock shown on the balance sheet?

Accepted Answer

A)  as an asset 
B)  as a decrease in stockholders' equity 
C)  as an increase in stockholders' equity 
D)  treasury stock is not shown on the balance sheet

Question 7

On February 1 of the current year, Motor, Inc. issued 700 shares of $2 par common stock to an attorney in return for preparing and filing the articles of incorporation. The value of the services is $9,600. Journalize this transaction.

Accepted Answer

The answer of On February 1 of the current year,...

Question 8

Under the corporate form of business organization,

Accepted Answer

A)  ownership rights are easily transferred 
B)  a stockholder is personally liable for the debts of the corporation 
C)  stockholders' acts can bind the corporation even though the stockholders have not been appointed as agents of the corporation 
D)  stockholders wishing to sell their corporate shares must get the approval of other stockholders

Question 9

The following transactions took place for the XYZ Corporation:
November 12 - Declared a total cash dividend of $45,000 for stockholders of record November 20 payable on December 1. Record the journal entries required by these events.
Briefly describe the significance of November 20.

Accepted Answer

The answer of The following transactions took place for the...

Question 10

A sale of treasury stock may result in a decrease in paid-in capital. All decreases should be charged to Paid-In Capital from Sale of Treasury Stock.

Accepted Answer

A) True 
 B)False

Question 11

The main source of paid-in capital is from issuing stock.

Accepted Answer

A) True 
 B)False

Question 12

For the current year ended, ABC had the following transactions:
- Issued 10,000 shares of $2.00 par value common stock for $12.00 per share.
- Issued 3,000 shares of $50 par value 6% preferred stock for $70 per share.
- Purchased 1,000 shares of previously issued common stock for $15.00 per share.
- Reported net income of $200,000.
- Declared and paid a total dividend of $40,000.
Assume that retained earnings had a beginning balance of $75,000.

-$150,000

Accepted Answer

A)  Treasury stock 
B)  Retained earnings 
C)  Preferred stock 
D)  Excess of issue price over par preferred) 
E) Common stock
F) Total paid-in capital
G) Excess of issue price over par common)h. Total stockholders' equity

Question 13

Match each of the following stockholders' equity concepts to the appropriate term a-h).
-Creditors cannot pursue stockholders' personal assets to satisfy claims

Accepted Answer

A) articles of incorporation 
B) limited liability 
C) bylaws 
D) corporation 
E) public corporation
F)board of directors
G)private corporation
H)dividends

Question 14

When common stock is issued in exchange for land, the land should be recorded in the accounts at the par value of the stock issued.

Accepted Answer

A) True 
 B)False

Question 15

Match each of the following stockholders' equity concepts to the most appropriate term a-h).
-A financial institution that records and maintains records of another company's stockholders.

Accepted Answer

A) authorized shares 
B) issued shares 
C) outstanding shares 
D) par value 
E) common stock
F)preferred stock
G)Paid-In Capital in Excess of Par
H)transfer agent

Question 16

When no-par stock is issued, Common Stock is credited for the selling price of the stock issued.

Accepted Answer

A) True 
 B)False

Question 17

The stock dividends distributable account is listed in the current liability section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 18

Match each of the following stockholders' equity concepts to the most appropriate term a-h).
-The number of shares currently held by stockholders

Accepted Answer

A) authorized shares 
B) issued shares 
C) outstanding shares 
D) par value 
E) common stock
F)preferred stock
G)Paid-In Capital in Excess of Par
H)transfer agent

Question 19

Macy Company has 10,000 shares of 2% cumulative preferred stock of $50 par and 25,000 shares of $75 par common stock. The following amounts were distributed as dividends:  Determine the dividends per share for preferred and common stock for each year.

Accepted Answer

The answer of Macy Company has 10,000 shares of 2%...

Question 20

A company had stock outstanding as follows during each of its first three years of operations: 2,500 shares of 10%,
$100 par, cumulative preferred stock and 50,000 shares of $10 par common stock. The amounts distributed as dividends are presented below. Determine the total and per-share dividends for each class of stock for each year by completing the schedule.

Accepted Answer

The answer of A company had stock outstanding as follows...

Exam 11: Corporations: Organization, Stock Transactions, and Dividends

The issuance of common stock affects both paid-in capital and retained earnings.

The declaration and issuance of a stock dividend does not affect the total amount of a corporation's assets, liabilities, or stockholders' equity.

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

How is treasury stock shown on the balance sheet?

On February 1 of the current year, Motor, Inc. issued 700 shares of $2 par common stock to an attorney in return for preparing and filing the articles of incorporation. The value of the services is $9,600. Journalize this transaction.

Under the corporate form of business organization,

The following transactions took place for the XYZ Corporation: November 12 - Declared a total cash dividend of $45,000 for stockholders of record November 20 payable on December 1. Record the journal entries required by these events. Briefly describe the significance of November 20.

A sale of treasury stock may result in a decrease in paid-in capital. All decreases should be charged to Paid-In Capital from Sale of Treasury Stock.

The main source of paid-in capital is from issuing stock.

Match each of the following stockholders' equity concepts to the appropriate term a-h) . -Creditors cannot pursue stockholders' personal assets to satisfy claims

When common stock is issued in exchange for land, the land should be recorded in the accounts at the par value of the stock issued.

Match each of the following stockholders' equity concepts to the most appropriate term a-h) . -A financial institution that records and maintains records of another company's stockholders.

When no-par stock is issued, Common Stock is credited for the selling price of the stock issued.

The stock dividends distributable account is listed in the current liability section of the balance sheet.

Match each of the following stockholders' equity concepts to the most appropriate term a-h) . -The number of shares currently held by stockholders

Macy Company has 10,000 shares of 2% cumulative preferred stock of $50 par and 25,000 shares of $75 par common stock. The following amounts were distributed as dividends: Determine the dividends per share for preferred and common stock for each year.