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Exam 10: Corporations: Paid-In Capital and Retained Earnings

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Question 61

Multiple Choice

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The entry to record selling 800 shares of stated value $37 common stock for $59 per share would be:

A) debit Cash $47,200; credit Common Stock $29,600; credit Paid-in Capital in Excess of Stated Value-$17,600.
B) debit Cash $29,600; credit Common Stock $29,600.
C) debit Cash $29,600; debit Paid-in Capital in Excess of Stated Value-$17,600; credit Common Stock $47,200.
D) debit Cash $47,200; credit Common Stock $47,200.

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Question 62

Multiple Choice

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On the date of payment:

A) debit Dividends and credit Retained Earnings.
B) debit Dividends Payable and credit Cash.
C) debit Cash and credit Dividends Payable.
D) debit Retained Earnings and credit Dividends Payable.

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Question 63

Multiple Choice

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Elite Electrical has 360,000 shares of $3-par common stock outstanding. They have declared a 6% stock dividend. The current market price of the common stock is $8.50/share. The amount that will be debited to Retained Earnings on the date of declaration is:

If a stock has a stated value of $1, this means that the stock sells for $1 per share.

Before a 5-for-3 stock split, the shares outstanding were 45,000 shares at $15 par. After the split, what was the par value and number of shares? (Round any intermediary calculations to two decimal places, and your final answer to the nearest whole number.)

If you own 1,200 shares (3% of a corporation's stock) and the corporation issues 11,000 new shares, how many total shares will you have after exercising your preemptive right?

Which right do preferred stockholders receive before common stockholders?

On the date of record:

When treasury stock is sold at or below cost, the Paid-in-Capital - Common Stock account will be debited or credited for the difference.

Outstanding stock of a corporation represents 100% of its ownership.

A company may purchase treasury stock if they are trying to avoid a takeover.

If a company has 33,000 shares outstanding before a 5-for-3 stock split, then after the split they will have 55,000 shares outstanding.

Sassycat, Inc. has a $9,000 credit balance in Paid-In Capital - Treasury Stock. It sells 4,500 shares of treasury stock, which the company reacquired at $35/share for $29/share. The journal entry to record this sale is:

The major parts of the Stockholders' Equity section of the Balance Sheet are:

Sonny's Sails has declared a $44,000 cash dividend to shareholders. The company has 4,000 shares of $20-par, 6% preferred stock and 10,000 shares of $16-par common stock. The preferred stock is non-cumulative. How much will be distributed to the preferred and common stockholders on the date of payment?

Caesar Corporation has 280,000 shares of $9-par common stock outstanding. They have declared a 8% stock dividend. The current market price of the common stock is $14/share. The amount that will be credited to Paid-in Capital in Excess of Par Common Stock on the date of declaration is:

Corporations declare cash dividends from Retained Earnings.

One of the ways a stockholder can help manage a corporation is through their right to vote.

In the Stockholders' Equity section of a Balance Sheet:

If a company's return on equity is 25.21%, this means that the company earned its stockholders net income of $25.21 per dollar invested.