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Exam 13: Corporations: Organization, Stock Transactions, and Dividends

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Question 111

Multiple Choice

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Match each of the following stockholders' equity concepts to the most appropriate term (a-h) . -A class of stock that provides no preference rights to shareholders

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

I) A) and C)
J) F) and G)

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Question 112

Multiple Choice

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The term deficit is used to refer to a debit balance in which of the following accounts of a corporation?

A) Retained Earnings
B) Treasury Stock
C) Organizational Expenses
D) Common Stock

E) All of the above
F) C) and D)

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Question 113

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A deficit in Retained Earnings is reported in the Stockholders' equity section of the balance sheet.

Earnings per share

Nexis Corp. issues 1,000 shares of $15 par value common stock at $22 per share. When the transaction is recorded, credits are made to

Cash dividends become a liability to a corporation on the date of record.

Match each of the following stockholders' equity concepts to the appropriate term (a-h) . -The date when dividends are actually distributed to stockholders

Prepare entries to record the following: (a)Issued 1,000 shares of $10 par common stock at $56 for cash. (b)Issued 1,400 shares of $10 par common stock in exchange for equipment with a fair market price of $21,000. (c)Purchased 100 shares of treasury stock at $25. (d)Sold the 100 shares of treasury stock purchased in (c) at $30.

When a corporation completes a 3-for-1 stock split,

The retained earnings statement may be combined with the income statement.

If paid-in capital in excess of par/preferred stock is $30,000, preferred stock is $200,000, paid-in capital in excess of par/common stock is $20,000, common stock is $525,000, and retained earnings is $105,000 (deficit), total stockholders' equity is $880,000.

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 40,000 shares were originally issued and 10,000 were subsequently reacquired. What is the number of shares outstanding?

Kansas Company acquired a building valued at $210,000 for property tax purposes in exchange for 12,000 shares of its $5 par common stock. The stock is widely traded and selling for $15 per share. At what amount should the building be recorded by Kansas Company?

Under the Internal Revenue Code, corporations are required to pay federal income taxes.

Match each of the following stockholders' equity concepts to the appropriate term (a-h) . -Equity account reflecting shares "owed" to stockholders

Marcos Company, which had 35,000 shares of common stock outstanding, declared a 4-for-1 stock split.​Required (a)What will be the number of shares outstanding after the split? (b)If the common stock had a market price of $280 per share before the stock split, what would be an approximate market price per share after the split?

Treasury stock should be reported in the financial statements of a corporation as a (n)