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Exam 12: Stockholders Equity

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Question 51

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The following information relates to the number of common shares of the Swan Corporation: 140,000 Authorized shares 60,000 Unissued shares 8,000 Treasury shares Calculate the number of outstanding shares from the information given.Show your calculations.

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72,000 shares outsta...

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Question 52

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

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B)

C)

D)

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Question 53

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Holders of preferred stock normally do not have

A corporation records a dividend-related liability

The information that follows pertains to stockholders' equity data of Frame Corporation on December 31,20x5.Compute the amount of each item indicated by a letter in the listing below.

Dividends in arrears must be paid when a corporation calls in its preferred stock.

Treasury stock is considered a reduction in stockholders' equity,not a purchase of assets .

The Additional Paid-in Capital account normally arises in the accounting records when

Indicate on the blanks below the effect (increase,decrease,no effect)of a stock split on each of the items listed.

Which of the following has an effect on total stockholders' equity?

One aspect of the corporate form can be considered both an advantage and a disadvantage.What aspect is this,and why can it be considered both?

Par value

Use the following information to answer the question below. The following transactions involving Cactus Wren Corporation occurred during the year: Apr. 1 Purchased 2,000 shares of its own preferred stock for $20, the current market price. This is the first transaction involving its own stock engaged in by the company. May 3 Sold 400 of the shares purchased on April 1 for $25 per share. June 5 Retired 600 of the shares purchased on April 1. The original issue price was $10. The par value of the stock is $5. -The entry to record the May 3 transaction is:

A small stock dividend normally results in a transfer from Retained Earnings to Contributed Capital of an amount equal to the market value of the stock.

The following facts pertain to the stockholders' equity section of the balance sheet of Avenida Corporation: During 20x5,Avenida declared and distributed a stock dividend.Also during 20x5,Avenida declared and paid cash dividends of $17,000.There were no changes in the number of shares of stock issued and outstanding during the period except for the change caused by the stock dividend.Calculate the amount of net income reported by Avenida for 20x5.

All of the following are stockholders' equity accounts except

Dividend yield is the most important ratio associated with stockholders' equity and is a common measure of management's performance.

The account Common Stock Distributable is classified as a current liability.

A stock dividend will cause an increase in total contributed capital at the date the dividend is declared.

Draw two distinctions between accounting for a stock split and accounting for a stock dividend.