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Exam 13: Accounting for Corporations

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Question 81

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Shamrock Company had net income of $30,000.The weighted-average common shares outstanding were 8,000.The company declared a $2,700 dividend on its noncumulative,nonparticipating preferred stock.There were no other stock transactions.The company's earnings per share is:

A) $2.87.
B) $2.73.
C) $3.41.
D) $3.16.
E) $3.75.

F) A) and C)
G) A) and E)

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Question 82

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How is the retirement of stock recorded?

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When a company's own stock is retired,al...

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Question 83

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A company is authorized to issue 750,000 shares of $5 par value common stock.Prepare journal entries to record the following selected transactions that occurred during the company's first year of operations:

A company had the following stockholders' equity on January 1: On January 10,the company declared a 40% stock dividend to holders of record on January 25,to be distributed January 31.The market value of the stock on January 10 prior to the dividend was $20 per share.What is the book value per common share on February 1?

On August 1,a corporation issued 15,000 shares of no-par common stock in exchange for a tract of land having a market value of $215,000.The common stock has a stated value of $10 per share.Prepare the general journal entry to record this transaction.

If a corporation receives assets other than cash in exchange for stock,it records the assets received at their market value as of the date of the transaction.

A premium on common stock:

A company has 40,000 shares of common stock outstanding.The stockholders' equity applicable to common shares is $470,000,and the par value per common share is $10.The book value per share is:

Callable preferred stock gives its holders the option of exchanging their preferred shares into common shares at a specified rate.

Stocks with a price-earnings ratio greater than 20 to 25 are likely to be underpriced.

A reverse stock split reduces the market value per share and the par value per share of stock.

A company reported the following stockholders' equity on January 1 of the current year: Prepare journal entries for the following selected transactions related to this company's stock during the current year:

A company reported stockholders' equity on January 1 of the current year as follows: Common Stock,$5 par value,1,000,000 shares authorized,600,000 shares issued; Paid-in Capital in Excess of Par Value,Common Stock,$1,025,000; Retained Earnings,$2,850,000.Prepare journal entries to record the following transactions:

Treasury stock is classified as:

The least amount that the buyers of stock must contribute to the corporation or be subject to paying at a future date is called ____________________________.

Par value per share is the price at which a share of stock is bought or sold.

A large stock dividend only occurs when a distribution of more than 50% of previously outstanding shares is issued.

If a company resells treasury stock below the acquisition cost,a loss from the sale of treasury stock is recorded.

A dividend preference for preferred stock means that:

________________________ is the number of shares that a corporation's charter allows it to sell.