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

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Question 51

Multiple Choice

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Treasury stock that had been purchased for $5,600 last month was reissued this month for $8,500. The journal entry to record the reissuance would include a credit to

A) Treasury Stock for $8,500
B) Paid-In Capital from Treasury Stock for $8,500
C) Paid-In Capital in Excess of Par/Common for $2,900
D) Paid-In Capital from Treasury Stock for $2,900

E) B) and C)
F) A) and D)

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Question 52

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The balance in Retained Earnings at the end of the period is created by closing entries.

A) True
B) False

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Question 53

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Match the following stockholder's equity concepts to the best answer.

What is the total stockholders' equity based on the following account balances?

Match the value to the appropriate account. For the year ended 2012 ABC had the following transactions: - issued 10,000 shares of $2.00 par value common stock for $12.00 per share - issued 3,000 shares of $50 par value 6% preferred stock for $70 per share - purchased 1000 shares of previously issued common stock for $15.00 per share -reported net income of $200,000 - declared and paid a total dividend of $40,000 Assume that retained earnings had a beginning balance of $75,000.

A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of $150. If the corporation issues a 5-for-1 stock split, the market value of the stock after the split will be approximately:

Par value

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

The par value of common stock must always be equal to its market value on the date the stock is issued.

Which one of the following would not be considered an advantage of the corporate form of organization?

A corporation purchased 1,000 shares of its $5 par common stock at $10 and subsequently sold 500 of the shares at $20. What is the amount of revenue realized from the sale?

If the dividend amount of preferred stock, $50 par value, is quoted as 8%, then the dividends per share would be $4.

Vincent Corporation has 100,000 share of $100 par common stock outstanding. On June 30, Vincent Corporation declared a 5% stock dividend to be issued on July 30 to stockholders of record July 15. The market price of the stock was $132 a share on June 30. Journalize the entries required on June 30, July 15 and July 30.

Which of the following is not true of a corporation?

The entry to record the issuance of 150 shares of $5 par common stock at par to an attorney in payment of legal fees for organizing the corporation includes a credit to

The primary purpose of a stock split is to

Which of the following amounts should be disclosed in the stockholders' equity section of the balance sheet?

Organizational expenses are classified as intangible assets on the balance sheet.

A restriction/appropriation of retained earnings establishes cash assets that are set aside for a specific purpose.

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends: Determine the dividends per share for preferred and common stock for each year.