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Exam 13: Stockholders Equity

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Question 71

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If a company retires preferred stock ________.

A) total stockholders' equity will decrease
B) total stockholders' equity will increase
C) the company can record a gain or loss on retirement of stock
D) the number of outstanding shares will go up

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Question 72

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A stock split decreases par value per share,whereas stock dividends do not affect par value per share.

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Question 73

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Prior period adjustments ________.

A corporation reported the following equity section on its current balance sheet.The common stock is currently selling for $12.00 per share. Which of the following would be included in the entry to record the distribution of a 15% stock dividend?

Which of the following would be included in the entry to record the issuance of 5,000 shares of $10 par value common stock at $13 per share cash?

A company originally issued 10,000 shares of $5 par value common stock at $9 per share.The board of directors declares an 8% stock dividend when the market price of the stock is $10 a share.Which of the following is included in the entry to record the declaration of a stock dividend?

Orleans Inc.was incorporated on January 1,2012.Orleans issued 4,000 shares of common stock and 500 shares of preferred stock on that date.The preferred stock is cumulative,$100 par,with an 8% dividend rate.Orleans has not paid any dividends yet.In 2015,Orleans had its first profitable year,and on November 1,2015,Orleans declared a total dividend of $28,000.What is the total amount that will be paid out to common stockholders?

Which of the following statements is true?

Which of the following best describes restrictions on cash dividends and treasury stock purchases?

Pearland Inc.has 50,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding.The common stock is $1.00 par value.The preferred stock has a $100 par value,a 5% dividend rate,and is noncumulative.On October 31,2015,the company declares dividends of $0.25 per share for common.Provide the journal entry for the declaration of dividends.

Which of the following represents one of the basic rights of stockholders?

The par value of stock is ________.

Paid-in capital is externally generated capital and results from transactions with outsiders.

Gordon Corporation reported the following equity section on its current balance sheet.The common stock is currently selling for $11.50 per share. After a 2-for-1 stock split,what would be the number of issued shares?

Landess Corporation currently has 120,000 shares outstanding of $1 par value common stock.The stock was originally issued for $12 per share.On March 15,the board of directors declares and distributes a 10% stock dividend when the stock is selling for $16 per share.Prepare the journal entry to record the stock dividend.

The following information is from the balance sheet of Lawson Corporation as of December 31,2015. What was the average issue price of the common stock shares?

From its inception through the year of 2014,Quicksales Inc.was profitable and made strong dividend payments each year.In the year 2015,Quicksales had major losses and paid no dividends.In 2016,the company started making large profits again,and they were able to pay dividends to all shareholders-both common and preferred.There are 1,500 shares of cumulative,7% preferred stock outstanding.The preferred stock has a par value of $100.What is the total amount of dividends that should be paid to the preferred stockholders in December,2016?

Bradley Corporation issued 10,000 shares of common stock on January 1,2015.The stock has a par value of $0.01 per share and was sold for cash at par.Which of the following is the correct journal entry to record this transaction?

If preferred stock is noncumulative,then the company needs to pay dividends that were passed in previous years.

A corporation has 15,000 shares of 10%,$50 par cumulative preferred stock outstanding and 25,000 shares of no-par common stock outstanding.Dividends of $37,500 are in arrears.At the end of the current year,the corporation declares a dividend of $120,000.How is the dividend allocated between preferred and common stockholders?