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Exam 11: Corporate Reporting and Analysis

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Question 81

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A corporation received its charter and began business this year.The company is authorized to issue 500,000 shares of $100 par,6%,noncumulative,nonparticipating preferred stock,and 1,000,000 shares of no-par common stock.The following selected transactions occurred during this year: Prepare journal entries to record these transactions.

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Question 82

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Cash dividends reduce Retained Earnings.

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B) False

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Question 83

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A company paid $0.48 in cash dividends per share.Its earnings per share is $3.20 and its market price per share is $20.00.Its dividend yield equals:

A company reported $960,000 in net income for the current year.Total weighted-average common shares outstanding are 150,000 shares,and the year-end market price is $67.20 per common share.Calculate the company's price earnings ratio.

Fetzer Company declared a $0.55 per share cash dividend.The company has 200,000 shares authorized,190,000 shares issued,and 8,000 shares in treasury stock.The journal entry to record the dividend declaration is:

Purchasing treasury stock reduces the corporation's assets and stockholders' equity by unequal amounts.

Treasury stock is stock that has been authorized,issued,and is outstanding.

Explain how each of the following items should be reported by a corporation: (1)The accounting department discovered that an entry was made last year to Insurance Expense instead of to Prepaid Insurance.The after-tax effect of the charge to Insurance Expense was $5,000. (2)The accounting department determined the depreciable lives of equipment will be five years instead of the original estimate of seven years.

The Discount on Common Stock account reflects:

________ is a general term that refers to any shares issued to obtain owner financing in a corporation.

Market value per share is:

On August 1,a company's board of directors declared a 10% stock dividend to be distributed on September 1 to the stockholders of record on August 20.The company had 1,000,000 shares of $2.50 par value common stock outstanding with a market value of $23 per share.Prepare the journal entries required on August 1,August 20,and September 1.

Rhoads Corporation is authorized to issue 250,000 shares of $50 par,10%,noncumulative,nonparticipating preferred stock and 5,000,000 shares of no-par common stock.Prepare journal entries to record the following selected transactions that occurred during this year:

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

Stockholders' equity consists of which of the following?

The amount assigned per share to stock by the corporation in its charter is the ________.

A corporation may not legally give shares of its stock to promoters in exchange for their services in organizing the corporation.

The group responsible for overseeing the corporation's activities is (are)the ________.

If a corporation receives assets other than cash in exchange for stock,it records the assets received at their market value.

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share.The issue price was $10 per share.The entry to record this transaction would be: