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Exam 11: Corporations: Organisations, Stock Transactions and Stockholders Equity

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Question 41

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Win, Inc.has 10,000 shares of 7%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2021.If the board of directors declares a $70,000 dividend, the

A) preferred shareholders will receive 1/10th of what the common shareholders will receive.
B) preferred shareholders will receive the entire $70,000.
C) $70,000 will be held as restricted retained earnings and paid out at some future date.
D) preferred shareholders will receive $35,000 and the common shareholders will receive $35,000.

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Question 42

Multiple Choice

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Stockholders of a corporation directly elect

A) the president of the corporation.
B) the board of directors.
C) the treasurer of the corporation.
D) all of the employees of the corporation.

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Question 43

Multiple Choice

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Art, Inc.has 5,000 shares of 4%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2021.There were no dividends declared in 2019.The board of directors declares and pays a $45,000 dividend in 2020 and in 2021.What is the amount of dividends received by the common stockholders in 2021?

On November 1, 2021, Nate Corporation's stockholders' equity section is as follows: On November 1, Nate declares and distributes a 15% stock dividend when the market value of the stock is $14 per share. Instructions Indicate the balances in the stockholders' equity accounts after the stock dividend has been distributed.

The outstanding stock of Zone Corporation included 20,000 shares of $5 par common stock and 5,000 shares of 6%, $10 par noncumulative preferred stock.In 2020, Zone declared and paid dividends of $2,000.In 2021, Zone declared and paid dividends of $6,000.How much of the 2021 dividend was distributed to preferred shareholders?

A stockholder who receives a stock dividend would

Moore, Inc.had 250,000 shares of common stock outstanding before a stock split occurred, and 1,000,000 shares outstanding after the stock split.The stock split was

Hsu, Inc.issued 10,000 shares of stock at a stated value of $8/share.The total issue of stock sold for $15 per share.The journal entry to record this transaction would include a

Identify the effect the declaration and distribution of a stock dividend has on the par value per share.Par value per share

Aaron, Inc.paid $120,000 to buy back 10,000 shares of its $1 par value common stock.This stock was sold later at a selling price of $8 per share.The entry to record the sale includes a

Treasury stock should not be classified as a current asset.

On January 1, Soft Corporation had 80,000 shares of $10 par value common stock outstanding.On June 17, the company declared a 10% stock dividend to stockholders of record on June 20.The market value of the stock was $15 on June 17.The entry to record the transaction of June 17 would include a

On January 1, Edison Corporation had 1,000,000 shares of $10 par value common stock outstanding.On March 31, the company declared a 20% stock dividend.The market value of the stock was $18 per share.As a result of this event,

Outstanding stock of the Core Corporation included 20,000 shares of $5 par common stock and 10,000 shares of 6%, $10 par noncumulative preferred stock.In 2020, Core declared and paid dividends of $4,000.In 2021, Core declared and paid dividends of $12,000.How much of the 2021 dividend was distributed to preferred shareholders?

If a stockholder cannot attend a stockholder's meeting, they may delegate their voting rights by means of

Instructions On the basis of the explanation for each entry, prepare the entry that should have been made for the transactions.

Which of the following is not a right or preference associated with preferred stock?

Dividends are predominantly paid in

A proxy is a legal document that instructs a stockholder's agent on how to vote shares of stock for the stockholder.