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Exam 11: Accounting for Equity

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Question 21

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A company had stockholders' equity on January 1 as follows: Common Stock, $10 par value, 1,000,000 shares authorized, 250,000 shares issued; Contributed Capital in Excess of Par Value, Common Stock, $750,000 and Retained Earnings of $2,700,000. On May 20, $1,500,000 worth of retained earnings was appropriated for a plant expansion to be constructed next year. Prepare the journal entry to record the appropriation.

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Question 22

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The date the board of directors votes to pay a dividend is called the:

A) Date of stockholders' meeting
B) Date of declaration
C) Date of record
D) Date of payment
E) Liquidating date

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Question 23

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The following data regarding its common stock were reported by a corporation: $\begin{array}{|l|r|}\hline \text { Authorized shares } & 20,000 \\\hline \text { Issued shares } & 15,000 \\\hline \text { Treasury shares } & 3,000 \\\hline\end{array}$ The number of outstanding shares is:

A company has net income of $2,800,000. It also has 400,000 weighted-average common shares outstanding and a price-earnings ratio of 20. What is the market value per share of this company's stock?

The least amount that the buyers of stock must contribute to the corporation or be subject to paying at a future date is called ____________________________.

A dividend preference for preferred stock means that:

A company has 3,000 shares of $2 par value common stock and 1,500 shares of 8%, $150 par, noncumulative preferred stock outstanding. The balance in Retained Earnings at the beginning of the year was $400,000. The net loss for the current year was $30,000. If the company paid a dividend of $1 per share on its common stock, what is the balance in Retained Earnings at the end of the year?

A corporation is responsible for its own acts and debts as the corporation is considered a ____________________________________.

A company had net income of $250,000. On January 1, there were 12,000 shares of common stock outstanding. On May 1, the company issued an additional 9,000 shares of common stock. The company declared a $7,900 dividend on its noncumulative, nonparticipating preferred stock. There were no other stock transactions. The company had earnings per share of:

A corporation began the current year with $250,000 of unappropriated retained earnings. During the current year it earned $120,000 of net (after-tax) income, declared $75,000 of cash dividends, paid $50,000 of the cash dividends and purchased treasury stock costing $40,000. Calculate the current year-end balance in retained earnings.

Dividend yield is the percent of cash dividends paid to common shareholders relative to the:

The Discount on Common Stock account reflects:

A company has 1,000 shares of $100 par preferred stock. 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:

Changes in accounting estimates are:

On August 31, 2013, Victory Corporation's common stock is priced at $30 per share before any stock dividend or split, and the stockholders' equity section of its balance sheet appears as follows. Assume that the company declares and immediately distributes a 15% stock dividend. $\begin{array}{lr}\text { Common stock — } \$ 7 \text { par value, } 95,000 \text { shares authorized, } 38,000 \text { shares }\\\text { issued and outstanding } & \$ 266,000 \\\text { Paid-in capital in excess of par value, common stock } & 100,000 \\\text { Retained earnings } & 366,000 \\\text { Total stockholders' equity } & \$ 732,000\end{array}$ What is the total amount in the Paid-In Capital in Excess of Par account immediately after the stock dividend?

A company paid $0.75 in cash dividends per share. It has earnings per share of $3.50 and a market price per share of $37.50. Its dividend yield equals:

No-par stock to which the directors assign a value per share is called _______________________.

A company has 500 shares of $50 par value preferred stock outstanding and the call price of its preferred stock is $60 per share. It also has 20,000 shares of common stock outstanding and the total value of its stockholders' equity is $680,000. The company's book value per common share equals:

A corporation reports the following year-end stockholders' equity: Determine the following: (1) Par value for the preferred stock. (2) Book value per share for both preferred stock and common stock assuming a call price per share of $52 for preferred and no dividends in arrears.

An amount of assets defined by state law that stockholders must invest and leave invested in a corporation is called the: