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Exam 11: Stockholders Equity

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Question 1

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If 20,000 shares are authorized, 15,000 shares are issued, and 500 shares are held as treasury stock, a cash dividend of $1 per share would amount to $15,000.

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B) False

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Question 2

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Explain what amount is recorded in the Additional Paid-in Capital account when stock is issued.

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The amount recorded in the Add...

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Question 3

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When treasury stock is reissued and the cost is less than the reissue price, the difference increases additional paid- in capital.

Debbie and Alex formed a new partnership. The partnership agreement specified that income should be allocated in a 2-to-1 ratio, with Debbie receiving the larger portion. If revenue for the first year was $90,000 and expenses were $60,000, how much would be allocated to each partner?

Abilene Western Shop began business on January 1, 2015. The corporate charter authorized issuance of 10,000 shares of $2 par value common stock and 4,000 shares of $8 par value, 6% cumulative preferred stock. Abilene issued 2,400 shares of common stock for cash at $20 per share on January 2, 2015. What effect does the entry to record the issuance of stock have on total stockholders' equity?

If a company purchases treasury stock for $6,000 and then reissues it for $5,000, the difference of $1,000 is

Basic Solutions Company reported net earnings of $60,000, declared and paid cash dividends on its common stock in the amount of $40,000 during the year, and sold 3,000 shares of $2 par value common stock for $15 per share during the year. What effects would these transactions have on the stockholders' equity accounts shown below?

What are the advantages of organizing a company as a corporation instead of a partnership or sole proprietorship?

Carlton Industries has identified the following items and would like you to answer a few questions about their effect on Stockholders' Equity. Items are used only once. -Which item decreases Retained Earnings and also credits a payable liability?

A sole proprietorship is a separate entity for legal purposes.

Authorized stock represents the

Assume that Milo Company's Stockholders' Equity category of the balance sheet appears as follows as of January 1, 2015: Assume that Milo's common stock is selling at $35 per share on that date. REQUIRED: What is the effect on the Stockholders' Equity section of Milo's balance sheet if the company issues a 3­for­1 stock split on January 2, 2015?

Which of the following is reported as a financing activity?

Refer to the information about Anole Company. The amount of Anole's total contributed capital at December 31, 2015, is

Park Avenue Toys reported the following information at December 31, 2015: Answer the following questions for Park Avenue Toys. 1. Would the book value per share increase, decrease, or remain the same, if the company declared a 3-for-1 stock split on December 31, 2015? Explain. 2. If cash dividends were declared on January 10, 2016, at $1 per share, by how much would retained earnings decrease as a result? Assume that the 3-for-1 stock split occurred.

Stockholders prefer to invest in preferred stock because

Which of the following combinations appropriately reflects the type of accounts represented by the Treasury Stock account and Additional Paid-in Capital --Treasury Stock account?

Use the comparative financial statements of Penny Company for the year ended December 31, 2015 to answer the following questions. Penny Company Statement of Stockholder's Equity for the Year Ended December 31, 2015 . REQUIRED: 1 What is the primary cause of the change in Penny's stockholders' equity from January 1, 2015 to December 31, 2015? 2 Did Penny declare dividends during 2015? How do you know? Which items would be included as part of comprehensive income, if any?

CarWorks Company has 100,000 authorized shares of $4 par common stock. The company issued 40,000 shares at $8. Subsequently, CarWorks declared a 2% stock dividend on a date when the market price was $11 a share. What is the amount transferred from the retained earnings account to paid-in capital accounts as a result of the stock dividend?

When a company declares a 3-for-1 stock split, the number of outstanding shares