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Exam 11: Corporate Reporting and Analysis

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Question 21

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A corporation had 20,000 shares of $10 par value common stock outstanding on Jan 10. Later that day the board of directors declared a 30% stock dividend when the market value of each share was $40. The entry to record this dividend is:

A)
B)
C)
D)
E) No entry is made until the stock is issued

F) B) and E)
G) A) and E)

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Question 22

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_______________________ are responsible for and have final authority for managing a corporation's activities.

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The board ...

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Question 23

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A company reported net income of $850,000 for the current year. The year-end market price per common share was $12 and there were 425,000 weighted-average shares of common stock outstanding. Calculate the company's price-earnings ratio.

Changes in accounting estimates are accounted for in current and future periods.

Explain the components of the statements retained earnings and identify the special items that are reported in it.

The total amount of cash and other assets the corporation receives from its stockholders in exchange for common stock is called __________________________.

For each of the following independent transactions a through d, prepare the necessary journal entry: (a) Declared a $0.40 per share cash dividend on 200,000 shares of preferred stock outstanding. (b) Declared and distributed a 12% stock dividend on 800,000 shares of $5 par value common stock outstanding. Market price per common share on this date was $25. (c) Declared and distributed a 2-for-1 stock split on 500,000 shares of $10 par value common stock outstanding. (d) Declared and distributed a 30% stock dividend on 400,000 common shares of $5 par value common stock outstanding. Market price per common share on this date was $20.

The right of common shareholders to protect their proportionate interest in a corporation by having the first opportunity to buy additional proportionate shares of common stock issued by the corporation is called a:

On August 31, 2010 Victory Corporation's common stock is priced at $30 per share before any stock dividend or split, and the stockholders' equity section of its balance sheet appears as follows. Assume that the company declares and immediately distributes a 100% stock dividend. What is the total amount in the Retained Earnings account immediately after the stock dividend?

On July 31, a company declared a cash dividend of $0.25 per common share to the shareholders of record on August 15. The cash dividend will be paid on August 25. This company has 500,000 shares authorized and 100,000 shares outstanding. Prepare the journal entries required on July 31, August 15 and August 25.

A company issued 60 shares of $100 par value stock for $7,000 cash. The total amount of contributed capital in excess of par is:

A company's board of directors' votes to declare a cash dividend of $0.75 per share. The company has 15,000 shares authorized, 10,000 issued and 9,500 shares outstanding. The total amount of the cash dividend is:

A company has 1,000 shares of $100 par preferred stock. It also has 25,000 shares of common stock outstanding and its total stockholders' equity equals $500,000. The book value per common share is:

What is an extraordinary gain or loss? How is it presented on a complete income statement? Be sure to include examples of extraordinary items.

Shamrock Company had net income of $30,000. On January 1, there were 8,000 share of common stock outstanding. On April 1, the company issued an additional 2,000 shares of common stock. The company declared a $2,700 dividend on its noncumulative, nonparticipating preferred stock. There were no other stock transactions. The company has an earnings per share of:

___________________________ are corrections of material errors in prior period financial statements.

A company declared a $0.50 per share cash dividend. The company has 20,000 shares authorized, 9,000 shares issued and 8,000 shares of common stock outstanding. The journal entry to record the dividend declaration is:

A company is authorized to issue 50,000 shares of $50 par, 10%, noncumulative, nonparticipating preferred stock and 500,000 shares of no-par common stock. Prepare journal entries to record the following selected transactions that occurred during this year:

A corporation issued 5,000 shares of $10 par value common stock in exchange for some land with a market value of $60,000. The entry to record this exchange is:

Common stock always carries a preference for receiving dividends over preferred stock.