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Exam 13: Stockholders Equity

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Question 81

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Dallkin Corporation issued 10,000 shares of common stock on January 1,2017.The stock has no par value and was issued at $17 per share.The journal entry for this transaction includes a ________.

A) debit to Cash for $170,000 and a credit to Common Stock-No-Par Value for $170,000
B) debit to Cash for $170,000 and a credit to Paid-In Capital in Excess of Par-Common for $170,000
C) credit to Cash for $170,000 and a debit to Common Stock-No-Par Value for $170,000
D) credit to Cash for $170,000,a debit to Paid-In Capital in Excess of Par-Common for $10,000,and a debit to Common Stock-No-Par Value for $160,000

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Question 82

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Castle,Inc.had the following transactions in 2017,its first year of operations: • Issued 20,000 shares of common stock.The stock has a par value of $3.00 per share and was issued at $19.00 per share. • Issued 2,000 shares of $200 par value preferred stock at par. • Earned net income of $40,000. • Paid no dividends. At the end of 2017,what is the total amount of paid-in capital?

A) $820,000
B) $460,000
C) $380,000
D) $780,000

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Question 83

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Earnings per share is calculated as net income plus preferred dividends divided by the average number of common shares outstanding.

Which of the following occurs when a corporation distributes a stock dividend?

The following information is from the December 31,2017 balance sheet of Lawson Corporation. $\begin{array} { | l | r | } \hline \text { Preferred Stock, } \$ 100 \text { par } & \$ 560,000 \\\hline \text { Paid-In Capital in Excess of Par-Preferred } & 43,000 \\\hline \text { Common Stock, } \$ 1 \text { par } & 190,000 \\\hline \text { Paid-In Capital in Excess of Par-Common } & 510,000 \\\hline \text { Retained Earnings } & \underline { 191,500 } \\\hline \text { Total Stockholders' Equity } & \$ 1,494,500 \\\hline\end{array}$ What was the average issue price of the common stock shares? (Round your answer to the nearest cent. )

The purchase of treasury stock ________.

Which of the following is a true statement regarding the effect of a stock split and stock dividend on total assets or liabilities?

Companies can report a negative amount in retained earnings.

On March 31,2017,Park Place,Inc.shows the following data on its balance sheet: $\begin{array} { | l | r | } \hline \text { Stockholders' Equity } & \\\hline \text { Common Stock, } \$ 1 \text { Par, 1,180,000 shares authorized } & \\\hline 240,000 \text { shares issued, 230,000 shares outstanding } & \$ 240,000 \\\hline \text { Paid-In Capital in Excess of Par-Common } & 2,560,000 \\\hline \text { Retained Earnings } & 4,790,000 \\\hline \text { Treasury stock, 15,000 shares at } \$ 40 & \underline { - 600,000 } \\\hline \text { Total Stockholder's Equity } & \$ 6,990,000 \\\hline\end{array}$ Assume that Park Place sells 1,500 shares of treasury stock at $33 per share.What is total stockholders' equity after this transaction?

When stock is issued for assets other than cash,the transaction is recorded at the market value of the stock issued or the market value of the assets received,whichever is more clearly determinable.

Comment on how an investor would use each of the following ratios to evaluate business performance. $\begin{array} { | l | l | } \hline \text { Ratio } & \text { Comment } \\\hline \text { Price/Earnings Ratio } & \\\hline \text { Rate of Return on } & \\\text { Common Stock } & \\\hline\end{array}$

Dividends in arrears are ________.

Stockholders of a corporation are not personally liable for the corporation's debt.

Stock dividends have no effect on total stockholders' equity.

Which of the following is a basic right of stockholders?

Saturn Corporation has 13,000 shares of 14%,$84 par noncumulative preferred stock outstanding and 20,000 shares of no-par common stock outstanding.At the end of the current year,the corporation declares a dividend of $180,000.How is the dividend allocated between preferred and common stockholders?

If a company retires preferred stock,________.

A deficit occurs when a company has reoccurring losses and/or declares dividends in excess of retained earnings.

A corporation declares a dividend of $0.50 per share on 18,000 shares of common stock.Which of the following is included in the entry to record the declaration?

On November 1,2017,McEwing,Inc.declared a dividend of $5.00 per share.McEwing,Inc.has 20,000 shares of common stock outstanding and no preferred stock.The date of record is November 15,and the payment date is November 30,2017.Which of the following is the journal entry needed on November 30,2017?