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Exam 11: Corporations: Organization, Stock Transactions, and Dividends

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Question 41

Multiple Choice

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The excess of sales price of treasury stock over its cost should be credited to

A) Treasury Stock Receivable
B) Premium on Capital Stock
C) Paid-In Capital from Sale of Treasury Stock
D) Income from Sale of Treasury Stock

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Question 42

Multiple Choice

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

A) the number of shares of common stock outstanding
B) the number of shares of common stock issued
C) the number of shares of common stock authorized
D) all of these

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Question 43

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The dates of importance in connection with a cash dividend of $50,000 on a corporation's common stock are January 15, February 15, and March 15. Journalize the entries required on each date.

In which section of the financial statements would Paid­In Capital from Sale of Treasury Stock be reported?

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

Under the cost method, when treasury stock is purchased by the corporation, the par value and the price at which the stock was originally issued are important.

All of the following are normally found in a corporation's stockholders' equity section except

Journalize the following selected transactions completed during the current fiscal year: Mar. 4 The board of directors of New Town, Inc. declared a stock split that reduced the par of common shares from $100 to $20. This action increased the number of outstanding shares to 500,000. 26 Declared a dividend of $1.75 per share on the outstanding shares of common stock. Apr. 5 Paid the dividend declared on March 26. Nov. 1 Declared a 5% stock dividend on the common stock outstanding the fair market value of the stock to be issued is $25). Dec. 1 Issued the certificates for the common stock dividend declared on November 1.

Match each of the following stockholders' equity concepts to the most appropriate term a-h) . -The number of shares sold to stockholders

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:

Marcos Company, which had 35,000 shares of common stock outstanding, declared a 4-for-1 stock split. 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?

Using the following information, prepare the stockholders' equity section of the balance sheet. Seventy thousand shares of common stock are authorized and 7,000 shares have been reacquired.

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

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

The liability for a dividend is recorded on which of the following dates?

A corporation has 50,000 shares of $25 par stock outstanding. If the corporation issues a 3-for-1 stock split, the number of shares outstanding after the split will be

Nebraska Inc. issues 3,000 shares of common stock for $45,000. The stock has a stated value of $10 per share. The journal entry to record the stock issuance would include a credit to Common Stock for

For the current year ended, 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 1,000 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. -$15,000

On May 10, a company issued for cash 1,500 shares of no-par common stock with a stated value of $2) at $14, and on May 15, it issued for cash 2,000 shares of $15 par preferred stock at $58. Journalize the entries for May 10 and 15, assuming that the common stock is to be credited with the stated value.

Match the following stockholders' equity concepts to the appropriate term a-h) . -Account used when shares are issued for an amount greater than par value