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Exam 11: Corporate Reporting and Analysis

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Question 21

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

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Question 22

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When preferred stock is cumulative and the directors either do not declare a dividend to preferred stockholders or declare one that does not cover the total amount of cumulative dividends,the unpaid amount is called ________.

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Question 23

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Changes in retained earnings are commonly reported in the:

A corporation with $10 par common stock issues a small stock dividend.The capitalization of retained earnings is equal to:

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

A corporation sold 14,000 shares of its $1 par value common stock at a cash price of $13 per share.The entry to record this transaction would include:

The price-earnings ratio is calculated by dividing:

Achieving an increased return on common stock by paying dividends on preferred stock at a rate that is less than the rate of return earned with the assets invested from the preferred stock issuance is called:

Prior to May 1,Fortune Company has never had any treasury stock transactions.A company repurchased 100 shares of its common stock on May 1 for $5,000.On July 1,it reissued 50 of these shares at $52 per share.On August 1,it reissued the remaining treasury shares at $49 per share.What is the balance in the Paid-in Capital,Treasury Stock account on August 2?

Explain how to compute dividend yield and discuss how it is used in analysis of a company's financial condition.

Hutter Corporation declared a $0.50 per share cash dividend on its common shares.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 payment is:

Dynasty Corporation had stockholders' equity on January 1 as follows: Common Stock,$5 par value,1,000,000 shares authorized,400,000 shares issued; Paid-in Capital in Excess of Par Value,Common Stock,$800,000; Retained Earnings,$3,600,000.Prepare journal entries to record the following transactions: $\begin{array} { | l | l | } \hline \text { Feb. 15 } & \begin{array} { l } \text { The board of directors declared a 5\% stock dividend to } \\\text { stockholders of record on }\end{array} \\\hline & \begin{array} { l } \text { March 1, to be issued on March 20. The stock was trading at \$7 } \\\text { per share prior to the dividend }\end{array} \\\hline\\\hline \text { Mar. 1 } & \text { The date of record. } \\\hline \\ \hline \text { Mar. 20 } & \text { Issued the stock dividend. } \\\hline\end{array}$

A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share.The entry to record this transaction would be:

The group responsible for and have final authority for managing a corporation's activities is (are)the ________.

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

A company had a beginning balance in retained earnings of $400,000.It had net income of $50,000 and paid out cash dividends of $55,000 in the current period.The ending balance in retained earnings equals:

Common Stock Dividend Distributable is an equity account.

Which of the following is true of a stock dividend?

Book value per share:

Given the following information about a corporation's current year activities,compute the retained earnings for the current year. $\begin{array} { |l | r| } \hline \text { Retained earnings, January 1 } & \$ 342,000 \\\hline \text { Cash dividends } & \$ 51,700 \\\hline \text { Stock dividends } & \$ 40,000 \\\hline \text { Net income } & \$ 141,000 \\\hline\end{array}$