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Exam 12: Corporations: Organization, Stock Transactions, and Dividends

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Question 1

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Match each of the following stockholders' equity concepts to the most appropriate term (a-h). -A financial institution that records and maintains records of another company's stockholders. A)authorized shares B)issued shares C)outstanding shares D)par value E)common stock F)preferred stock G)Paid-In Capital in Excess of Par H)transfer agent

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Question 2

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Nebraska Inc. issues 3,000 shares of common stock for $45,000. The stock has a stated value of $10 per share. The journal entry to record the stock issuance would include a credit to Common Stock for

A) $30,000
B) $45,000
C) $15,000
D) $3,000

E) A) and B)
F) A) and C)

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Question 3

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Prepare entries to record the following: (a)Issued 1,000 shares of $10 par common stock at $56.(b)Issued 1,400 shares of $10 par common stock in exchange for equipment with a fair market price of $21,000.(c)Purchased 100 shares of treasury stock at $25.(d)Sold the 100 shares of treasury stock purchased in (c) at $30.

When common stock is issued in exchange for land, the land should be recorded in the accounts at the par value of the stock issued.

Alma Corp. issues 1,000 shares of $10 par common stock at $14 per share. Journalize the transaction.

The cost of treasury stock is deducted from total paid-in capital and retained earnings in determining total stockholders' equity.

A corporation is a separate entity for accounting purposes but not for legal purposes.

Which of the following is not true of a corporation?

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Stockholders' equity

A large public corporation normally uses registrars and transfer agents to maintain records of the stockholders.

Match the following stockholders' equity concepts to the appropriate term (a-h).​ -Account used when shares are issued for an amount greater than par value A)cash dividend B)date of record C)Stock Dividends Distributable D)date of declaration E)treasury stock F)preferred stock G)date of payment H)Paid-In Capital in Excess of Par

For accounting purposes, stated value is treated the same way as par value.

On February 1, Marine Company reacquired 7,500 shares of its common stock at $30 per share. On March 15, Marine sold 4,500 of the reacquired shares at $34 per share. On June 2, Marine sold the remaining shares at $28 per share.​ Journalize the transaction of February 1, March 15, and June 2.

A restriction/appropriation of retained earnings establishes cash assets that are set aside for a specific purpose.

On January 1, Year 1, a company had the following transactions: - Issued 10,000 shares of $2.00 par common stock for $12.00 per share.- Issued 3,000 shares of $50 par, 6% cumulative preferred stock for $70 per share.- Purchased 1,000 shares of previously issued common stock for $15.00 per share.- No other shares of stock were issued or outstanding.​ The company had the following dividend information available: Year 1 - No dividend paid Year 2 - Paid a $2,000 total dividend Year 3 - Paid a $20,000 total dividend Year 4 - Paid a $25,000 total dividend Using the following format, fill in the correct values for each year:

Match each of the following stockholders' equity concepts to the most appropriate term (a-h). -The dollar amount assigned to each share of stock A)authorized shares B)issued shares C)outstanding shares D)par value E)common stock F)preferred stock G)Paid-In Capital in Excess of Par H)transfer agent

The liability for a dividend is recorded on which of the following dates?

The two main sources of stockholders' equity are​

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends: Year 1: $10,000 Year 2: 45,000 Year 3: 90,000 Determine the dividends per share for preferred and common stock for the third year.