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Exam 12: Corporations: Organization, stock Transactions, and Dividends

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Question 41

True/False

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A stock split results in a transfer at market value from retained earnings to paid-in capital.

A) True
B) False

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Question 42

Multiple Choice

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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

A) 150,000 shares
B) 50,000 shares
C) 100,000 shares
D) 16,666 shares

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

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Question 43

Multiple Choice

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Match each of the following stockholders' equity concepts to the most appropriate term (a-h) . -The maximum number of shares a company can issue to shareholders

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

Which of the following is not a characteristic of a corporation?

On April 10,Maranda Corporation issued for cash 11,000 shares of no-par common stock at $25.On May 5,Maranda issued at par 1,000 shares of 4%,$50 par preferred stock for cash.On May 25,Maranda issued for cash 15,000 shares of 4%,$50 par preferred stock at $55. ​ Journalize the entries to record the April 10,May 5,and May 25 transactions.

Match each of the following stockholders' equity concepts to the most appropriate term (a-h) . -The dollar amount assigned to each share of stock

The stock dividends distributable account is listed in the current liability section of the balance sheet.

Treasury Stock is listed in the stockholders' equity section on the balance sheet.

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

One of the main disadvantages of the corporate form is the

Retained Earnings represents past net income less past dividends,therefore any balance in this account would be listed on the income statement.

Prepare entries to record the following:

The number of shares of outstanding stock is equal to the number of shares authorized minus the number of shares issued.

Prepare entries to record the following selected transactions completed during the current fiscal year:

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

A corporation has 10,000 shares of $100 par stock outstanding.If the corporation issues a 5-for-1 stock split,the number of shares outstanding after the split will be 40,000.

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

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.

Solar Company has 600,000 shares of $75 par common stock outstanding.On February 13,Solar declared a 3% stock dividend to be issued on April 30 to stockholders of record on March 14.The market price of the stock was $90 per share on February 13. ​ Journalize the entries required on February 13,March 14,and April 30.