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Exam 14: Corporations: Dividends, Retained Earnings, and Income Reporting

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Question 51

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The following information is available for Rubio Corporation for the year ended December 31 2017: Sales revenue $900000; Other revenues and gains $72000; Operating expenses $110000; Cost of goods sold $520000; Other expenses and losses $32000; Preferred stock dividends $30000. The company's tax rate was 20% and it had 40000 shares outstanding during the entire year. Instructions Calculate earnings per share.

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Question 52

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The correction of an error in previously issued financial statements is known as a _________________.

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Question 53

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Paiva Corporation splits its common stock 2 for 1 when the market value is $80 per share. Prior to the split Paiva had 100000 shares of $10 par value common stock issued and outstanding. After the split the par value of the stock

A net loss

Income statements for corporations report _______________ in a separate section before net income.

When stock dividends are distributed

The return on common stockholders' equity is computed by dividing net income available to common stockholders by

As part of a Careers in Accounting program sponsored by accounting organizations and supported by your company you will be taking a group of high-school students through the accounting department in your company. You will also provide them with various materials to explain the work of an accountant. One of the materials you will provide is the Stockholders' Equity section of a recent balance sheet. Required: Prepare a sentence or two explaining each major section: Common Stock Additional Paid-in Capital and Retained Earnings. You should try to be brief but clear.

On the dividend record date

The balance in retained earnings on January 1 2017 for Hotel Plaza Inc. was $575000. During the year the corporation paid cash dividends of $70000 and distributed a stock dividend of $15000. In addition the company determined that it had overstated its depreciation expense in prior years by $50000. Net income for 2017 was $120000. Instructions Prepare the retained earnings statement for 2017.

The return on common stockholders' equity is computed by dividing

At December 31 2017 Florrict Company has $500000 of $100 par value 6% cumulative preferred stock outstanding and $2000000 of $10 par value common stock issued. Florrict's net income for the year is $410000. Instructions Compute earnings per share of common stock for 2017 under the following independent situations. (Round to two decimals.) (a) The dividend to preferred stockholders was declared and there has been no change in the number of shares of common stock outstanding during the year. (b) The dividend to preferred stockholders was not declared and 10000 shares of common treasury stock were held throughout the year. The preferred stock is cumulative.

A debit balance in the Retained Earnings account is identified as a deficit.

Earnings per share is reported only for ________________.

The per share amount normally assigned by the board of directors to a small stock dividend is

A 10% stock dividend will increase the number of shares outstanding but the par value per share will stay the same.

On January 1 Key Corporation had 2000000 shares of $10 par value common stock outstanding. On March 31 the company declared a 20% stock dividend. Market value of the stock was $15/share. As a result of this event

Corporations sometimes segregate retained earnings into two categories: (1)________________ retained earnings and (2)________________ retained earnings.

Assume that all balance sheet amounts for Carolina Company represent average balance figures. $\begin{array} { l r } \text { Stockholders' equity-common } & \$ 360,000 \\\text { Total stockholders' equity } & 800,000 \\\text { Sales revenue } & 400,000 \\\text { Net income } & 76,000 \\\text { Number of shares of common stock } & 40,000 \\\text { Common stock dividends } & 24,000 \\\text { Preferred stock dividends } & 4,000\end{array}$ What is the earnings per share for Carolina?

Return on common stockholders' equity is computed by dividing net income by ending stockholders' equity.