Question 1

James Company has 1,000 shares of $10 par preferred stock,which were issued at par.It also has 25,000 shares of common stock outstanding,and its total stockholders' equity equals $500,000.The book value per common share is:

Accepted Answer

A) $16.00. 
B) $19.60. 
C) $19.96. 
D) $20.00. 
E) $10.00.

Question 2

Organization expenses of a corporation often include legal fees and promoter fees.

Accepted Answer

A) True 
 B)False

Question 3

The total amount of cash and other assets the corporation receives from its stockholders in exchange for common stock is called ________.

Accepted Answer

The answer of The total amount of cash and other...

Question 4

The date of record is the date that directors vote to pay a cash dividend to shareholders.

Accepted Answer

A) True 
 B)False

Question 5

The ________ protects stockholders' proportional interest in a corporation by allowing them to purchase their proportional share of any common stock later issued by the corporation.

Accepted Answer

The answer of The ________ protects stockholders' proportional interest in...

Question 6

Gershwin Company reported net income of $428,000 and paid $8,500 in preferred cash dividends during the current year.The company had 110,000 common shares issued,and 10,000 common shares in treasury during the year.The year-end market price per common share was $41.05.Calculate the company's price-earnings ratio.

Accepted Answer

The answer of Gershwin Company reported net income of $428,000...

Question 7

Cumulative preferred stock carries the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders.

Accepted Answer

A) True 
 B)False

Question 8

Hutter Corporation declared a $0.50 per share cash dividend on its common shares.The company has 20,000 shares authorized,9,000 shares issued,and 8,000 shares of common stock outstanding.The journal entry to record the dividend payment is:

Accepted Answer

A) Debit Retained Earnings $4,000; credit Common Dividends Payable $4,000. 
B) Debit Common Dividends Payable $4,000; credit Cash $4,000. 
C) Debit Retained Earnings $4,500; credit Common Dividends Payable $4,500. 
D) Debit Common Dividends Payable $4,500; credit Cash $4,500. 
E) Debit Retained Earnings $10,000; credit Common Dividends Payable $10,000.

Question 9

Fargo Company's outstanding stock consists of 400 shares of noncumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value.During the first three years of operation,the corporation declared and paid the following total cash dividends. 
-The total amount of dividends paid to preferred and common shareholders over the three-year period is:

Accepted Answer

A) $15,000 preferred; $25,000 common. 
B) $11,000 preferred; $29,000 common. 
C) $5,000 preferred; $35,000 common. 
D) $12,000 preferred; $28,000 common. 
E) $10,000 preferred; $30,000 common.

Question 10

Eastline Corporation had 10,000 shares of $10 par value common stock outstanding when the board of directors declared a stock dividend of 3,000 shares.At the time of the stock dividend,the market value per share was $12.The entry to record this dividend is:

Accepted Answer

A) Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $36,000. 
B) Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $30,000; credit Paid-In Capital in Excess of Par Value,Common Stock $6,000. 
C) Debit Common Stock Dividend Distributable $36,000; credit Retained Earnings $36,000. 
D) Debit Retained Earnings $30,000; credit Common Stock Dividend Distributable $30,000. 
E) No entry is needed.

Question 11

On July 1,a corporation issued 15,000 shares of no-par common stock with a stated value of $3 per share in exchange for a tract of land having a market value of $215,000.Prepare the general journal entry to record this transaction.

Accepted Answer

The answer of On July 1,a corporation issued 15,000 shares...

Question 12

Corporations issue preferred stock to raise capital without giving up control of the corporation and/or to boost the return earned by common shareholders.

Accepted Answer

A) True 
 B)False

Question 13

A company reported net income of $836,000 for the current year.The year-end market price per common share was $12 and there were 475,000 weighted-average shares of common stock outstanding.Calculate the company's price-earnings ratio.

Accepted Answer

The answer of A company reported net income of $836,000...

Question 14

A corporation had current year net income of $237,500.It paid preferred dividends of $40,000 cash and had 480,000 weighted-average shares of common stock outstanding.Calculate the corporation's earnings per share.

Accepted Answer

The answer of A corporation had current year net income...

Question 15

Fargo Company's outstanding stock consists of 400 shares of noncumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value.During the first three years of operation,the corporation declared and paid the following total cash dividends. 
-The amount of dividends paid to preferred and common shareholders in Year 2 is:

Accepted Answer

A) $3,500 preferred; $2,500 common. 
B) $3,000 preferred; $3,000 common. 
C) $0 preferred; $6,000 common. 
D) $4,200 preferred; $1,800 common. 
E) $6,000 preferred; $0 common.

Question 16

Fargo Company's outstanding stock consists of 400 shares of noncumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value.During the first three years of operation,the corporation declared and paid the following total cash dividends. 
-The amount of dividends paid to preferred and common shareholders in year 1 is:

Accepted Answer

A) $200 preferred; $19,800 common. 
B) $4,000 preferred; $16,000 common. 
C) $17,000 preferred; $3,000 common. 
D) $10,000 preferred; $10,000 common. 
E) $20,000 preferred; $0 common.

Question 17

Cactus Joe Corporation reported stockholders' equity on January 1 of the current year as follows: Common Stock,$5 par value,1,000,000 shares authorized,600,000 shares issued; Paid-in Capital in Excess of Par Value,Common Stock,$1,025,000; Retained Earnings,$1,850,000.Prepare journal entries to record the following transactions:

Accepted Answer

The answer of Cactus Joe Corporation reported stockholders' equity on...

Question 18

What is a corporation? Identify the key advantages and disadvantages of corporations.

Accepted Answer

The answer of What is a corporation? Identify the key...

Question 19

Minimum legal capital is the least amount that the buyers of stock must contribute to the corporation or be at risk to pay creditors at a future date.

Accepted Answer

A) True 
 B)False

Question 20

The following data were reported by a corporation:  The number of outstanding shares is:

Accepted Answer

A) 12,000. 
B) 15,000. 
C) 17,000. 
D) 20,000. 
E) 23,000.

Exam 11: Corporate Reporting and Analysis

James Company has 1,000 shares of $10 par preferred stock,which were issued at par.It also has 25,000 shares of common stock outstanding,and its total stockholders' equity equals $500,000.The book value per common share is:

Organization expenses of a corporation often include legal fees and promoter fees.

The total amount of cash and other assets the corporation receives from its stockholders in exchange for common stock is called ________.

The date of record is the date that directors vote to pay a cash dividend to shareholders.

The ________ protects stockholders' proportional interest in a corporation by allowing them to purchase their proportional share of any common stock later issued by the corporation.

Cumulative preferred stock carries the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders.

Hutter Corporation declared a $0.50 per share cash dividend on its common shares.The company has 20,000 shares authorized,9,000 shares issued,and 8,000 shares of common stock outstanding.The journal entry to record the dividend payment is:

Eastline Corporation had 10,000 shares of $10 par value common stock outstanding when the board of directors declared a stock dividend of 3,000 shares.At the time of the stock dividend,the market value per share was $12.The entry to record this dividend is:

On July 1,a corporation issued 15,000 shares of no-par common stock with a stated value of $3 per share in exchange for a tract of land having a market value of $215,000.Prepare the general journal entry to record this transaction.

Corporations issue preferred stock to raise capital without giving up control of the corporation and/or to boost the return earned by common shareholders.

A company reported net income of $836,000 for the current year.The year-end market price per common share was $12 and there were 475,000 weighted-average shares of common stock outstanding.Calculate the company's price-earnings ratio.

A corporation had current year net income of $237,500.It paid preferred dividends of $40,000 cash and had 480,000 weighted-average shares of common stock outstanding.Calculate the corporation's earnings per share.

What is a corporation? Identify the key advantages and disadvantages of corporations.

Minimum legal capital is the least amount that the buyers of stock must contribute to the corporation or be at risk to pay creditors at a future date.

The following data were reported by a corporation: The number of outstanding shares is: