75 Matching questions
- Authorized stock
Corporation issues 10,000 shares of 10 percent, $100 par value
noncumulative preferred stock for $110 per share at the beginning of
2011. It did not pay any dividends in 2011 and 2012. In December 2013,
it declares total dividends of $250,000. The company issued common stock
in 2009. How much will the common stockholders of Marine Corporation
receive as dividends for the year?
- Mutual agency
- Privately held corporation
- Stock split
- The market value of a stock is determined by the par value of the common stock.
- Declaration date
- Model Business Corporation Act
Inc repurchases 1 million shares of its own $1 par value common stock
at $70 per share. It later reissues the 1 million shares of treasury
stock for $75. We record the $5 difference per share as a what?
Gain in the income statement
Credit to Additional Paid-in Capital
- What is a preemptive right?
Right to vote on matters that come before the stockholders, including the election of corporate directors
Right to share in profits when the company declares dividends
Right that allows a stockholder to maintain his or her percentage share of ownership when new shares are issued.
Right to share in the distribution of assets if the company is liquidated
- Almond Corporation repurchases 10,000 shares of its own $1 par value common stock at $10 per share. It will record this transaction with a debit to...
- If losses exceed income since the company began, Retained Earnings will have a credit balance.
- Value stocks
Inc., issues 10,000 shares of $0.01 par value common stock at $10 per
share. What is the amount of Additional Paid-In Capital recorded by the
Corporation issues 1,000 shares of $1 stated value common stock at $20
per share. What is the amount of Common Stock recorded by the company?
- What presents the balance of each equity account at a point in time?
Stockholders Equity Section of the balance sheet
Statement of Stockholders Equity
- Dividends in arrears
- Limited liability
they have voting rights, common stockholders receive priority over
preferred stockholders in the distribution of assets in the event the
corporation is dissolved.
- Stock dividends
- No-par value stock
Media issues 1,000 shares of 8 percent, $50 par value preferred stock
for $60 per share. Which of the following will be recorded at the time
of the issue?
a credit to Additional Paid-In Capital for $10,000
a debit to Cash for $50,000
a credit to Preferred Stock for $10,000
a credit to Preferred Stock for $60,000
- Articles of incorporation
- Retained earnings
- The Stock Dividends account is a temporary stockholders' equity account that is closed into ______.
a company uses a portion of the company's earnings to buy back treasury
shares. This action does what to stockholders' equity?
increases or decreases
- Return on equity
- Shares actually sold, which includes treasury stock
- Venture capital firms
- What are the primary Disadvantages of a corporate form of business?
- Initial public offering
market value of Kennedy Corporation's common stock is $100 per share
when it declares a 20 percent dividend on its 10,000 shares outstanding
of $1 par value common stock. The entry to record this small stock
dividend involves a _____.
debit to Stock Dividends for $2,000
credit to Common Stock for $200,000
credit to Additional Paid-In Capital for $198,000
debit to Cash for $200,000
- Return on the market value of equity
- _____ means that each individual partner in a partnership has the power to bind the business to a contract.
- Preferred stock
Corporation repurchases 10,000 shares of its own $0.01 par value common
stock at $10 per share. It later reissues the 10,000 shares of treasury
stock for $12. The entry to record this transaction will involve what
to Additional Paid-In Capital?
- Price-earnings ratio
- Earnings per share
- Par value
- Shares held by investors
- What are the primary advantages of a corporate form of business?
- S corporation
- Payment date
- Growth stocks
- Total number of shares available to sell
- On the date of declaration of the dividend, we _____.
debit Dividends Payable
credit Retained Earnings
- All of the following accounts are directly or indirectly affected by a large stock dividend except _____.
Additional Paid-In Capital
- Outstanding stock
- Publicly held corporation
investor is analyzing the relative risk of different investment options
in a company. Which of the following usually poses the highest amount
- Treasury stock
- Issued stock
- Statement of stockholders' equity
- Record date
- Additional paid-in capital
- Double taxation
Inc., issues 10,000 shares of 8 percent, $100 par value cumulative
preferred stock for $110 per share at the beginning of 2011. It did not
pay any dividends in 2011. In December 2012, it declares total dividends
of $200,000. The company issued common stock in 2008. How much will the
preferred stockholders of Lego receive as dividends?
- Which of the following dates associated with dividends do not require an entry to be recorded?
- If no-par value stock is issued, the corporation debits Cash and credits Common Stock.
- Why do most companies report a 100 percent stock distribution as a stock split to be recorded as a stock dividend?
to avoid changing the par value per share
to increase stock prices
to boost earnings per share and other key ratios
to avoid recording a transaction
- Organization chart
- Paid-in capital
- Stated value
assets, total liabilities, and total stockholders' equity do not change
as a result of a stock dividend, whether large or small.
- What account increases from the sale of treasury stock for more than its original cost?
Additional paid-in capital
- What is the net effect of a dividend declaration and payment?
reduction in both liabilities and assets
reduction in both stockholders' equity and assets
increase in both liabilities and stockholders' equity
increase in liabilities and decrease in stockholders' equity
- Accumulated deficit
- The statement of stockholders' equity summarizes the changes in the balance in each stockholders' equity account ..
over a period of time
at a point in time
- When a corporation repurchases its own stock, it debits Treasury Stock at ...
- Angel investors
- Companies usually rely on angel investors and venture capital firms following an initial public offering.
- a The date of the actual cash distribution of dividends
- b Describes the nature of the firm's business activities, the shares to be issued, and the composition of the initial board of directors
- c False, Preferred stockholders receive preference over common stockholders in the distribution of assets in the event the corporation is dissolved.
- d A debit balance in retained earnings
- e Provide additional financing, often in the millions, for a percentage ownership in the company
- f Net income divided by average stockholders' equity. Measures the income generated per dollar of equity
- g Credit
By repurchasing shares of its own stock for $10 per share and reselling them for $12 per share, Delta experienced an increase in additional paid-in capital. This is reflected in the entry as a credit to the Additional Paid-in Capital account.
- h The first time a corporation issues stock to the public
- i Unpaid dividends on cumulative preferred stock
- j Measures the net income earned per share on common stock
- k Shares can be returned to the corporation at a fixed price
- l Additional Paid-In Capital
We account for a large stock dividend with a debit to Stock Dividends and a credit to Common Stock. Stock Dividends is a temporary stockholders' equity account that is closed into Retained Earnings.
- m Right that allows a stockholder to maintain his or her percentage share of ownership when new shares are issued.
- n True, If no-par value stock is issued, the corporation debits Cash and credits Common Stock.
- o Distributions by a corporation to its stockholders
- p Net income divided by the market value of equity
- q Stocks that tend to have higher price-earnings ratios and are expected to have a higher future earnings
- r True
- s Serves as a guide to states in the development of their corporate statutes
- t Shares receive priority for future dividends, if dividends are not paid in a given year
- u Decreases
Think of how treasury stock is represented in the stockholders' equity section of the balance sheet.
- v The portion of the cash proceeds above par value
- w The amount stockholders have invested in the company
- x Authorized Stock
- y Summarizes the changes in the balance in each stockholders' equity account over a period of time
- z False, If losses exceed income since the company began, Retained Earnings will have a debit balance.
- aa Retained Earnings
- ab The number of shares sold to investors. Includes treasury shares
- ac Common stock has the highest amount of risk, followed by preferred stock, and finally bonds.
- ad A corporation pays income taxes on its earnings, and when dividends are distributed to stockholders, the stockholders pay taxes a second time on the corporate dividends they receive.
- ae debit Dividends
The declaration of a cash dividend creates a binding legal obligation for the company declaring the dividend. On that date, we increase Dividends, a temporary account that is closed into Retained Earnings at the end of each period, and increase the liability account, Dividends Payable.
- af Stock with preference over common stock in the payment of dividends and the distribution of assets
- ag reduction in both stockholders' equity and assets
The net effect is a reduction in both retained earnings (stockholders' equity) and cash (asset).
- ah The legal capital assigned per share to no-par stock
- ai A corporation's own stock that it has reacquired
- aj Shares can be exchanged for common stock
- ak Allows investment by the general public and is regulated by the Securities and Exchange Commission
- al Credit to Additional Paid-in Capital
Note that this is not the sale of an investment in another company.
- am Stockholders in a corporation can lose no more than the amount they invested in the company
- an Wealthy individuals in the business community willing to risk investment funds on a promising business venture
- ao The Additional Paid-in Capital account increases from the sale of treasury stock for more than its original cost.
- ap Allows a company to enjoy limited liability as a corporation, but tax treatment as a partnership
- aq Treasury stock, When a corporation repurchases its own stock, it debits Treasury Stock
- ar credit to Additional Paid-In Capital for $198,000
The entry involves a debit Stock Dividends for $200,000, a credit to Common Stock for $2,000, and a credit to Additional Paid-In Capital for the $198,000 difference.
- as 1000, Note that stated value is treated in the same manner as par value. The company credits the Common Stock account for stated value.
- at Additional shares of a company's own stock given to stockholders
- au 150000, Note that the preferred stock is noncumulative. So, preferred stockholders receive only their annual share of dividends. The remaining amount will be distributed to common stockholders.
- av Record Date
No entry is required on the record date. This is the specific date on which the company will determine the registered owners of stock and therefore who will receive the dividend.
- aw The total number of shares available to sell, stated in the company's articles of incorporation
- ax Lack of mutual agency
Ability to raise capital
- ay The number of shares held by investors (excludes treasury shares)
- az Issued Stock
- ba to avoid changing the par value per share
To avoid changing the par value per share, most companies report a 100 percent stock distribution as a stock split to be recorded as a stock dividend.
- bb Individual partners each have power to bing the partnership to a contract
- bc The day on which the board of directors declares the cash dividend to be paid
- bd Stocks that tend to have lower price-earnings ratios and are priced low in relation to current earnings
- be Represents all net income, less all dividends, since the company began
- bf We record treasury stock at its cost
- bg The legal capital assigned per share of stock
- bh The stockholders' equity section of the balance sheet shows the balance in each equity account at a point in time.
- bi The stock price divided by earnings per share so that both stock price and earnings are expressed on a per share basis
- bj Double Taxation
- bk Traces the line of authority for a typical corporation
- bl False, Par value has no relationship to the market value of the common stock.
- bm Outstanding Stock
- bn 160000, Note that the preferred stock is cumulative.
- bo 99900, We credit Additional Paid-In Capital for the portion of the cash proceeds above par value
- bp False. IPO is usually the last stage of equity financing. Dividens have to exceed 20 million first
- bq A specific date on which the company will determine the registered owners of stock and, therefore, who will receive the dividend
- br Mutual Agency
- bs over a period of time
- bt A large stock dividend that includes a reduction in the par or stated value per share
- bu Does not allow investment by the general public and normally has fewer stockholders
- bv a credit to Additional Paid-In Capital for $10,000
Note that Preferred Stock is credited for par value, and the difference between this and cash proceeds is credited to Additional Paid-In Capital.
- bw Common stock that has not been assigned a par value