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Exam 11: Reporting and Analyzing Stockholders Equity

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Question 91

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The sale of shares in a corporation by one stockholder to another affects the total capital of the corporation.

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Question 92

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Dividends in arrears are liabilities of the corporation.

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Question 93

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A corporate board of directors does not generally

Sizemore, Inc. has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2014. If the board of directors declares a $30,000 dividend, the

Identify the effect the declaration of a stock dividend has on the par value per share and book value per share.

All of the following statements about preferred stock are true except

The following are selected accounts and balances from the records of Doran Corporation on June 30, 2014. Instructions Prepare in proper form the stockholders' equity section of the balance sheet.

Logan Corporation issues 50,000 shares of $50 par value preferred stock for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $3,000,000 and a credit or credits to

What is the total stockholders' equity based on the following account balances?

Watson, Inc. has 10,000 shares of 6%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2014. There were no dividends declared in 2012. The board of directors declares and pays a $100,000 dividend in 2013 and in 2014. What is the amount of dividends received by the common stockholders in 2014?

A corporation purchases 20,000 shares of its own $10 par common stock for $25 per share, recording it at cost. What will be the effect on total stockholders' equity?

On November 1, 2014, Kalen Corporation's stockholders' equity section is as follows: On November 1, Kalen declares and distributes a 15% stock dividend when the market value of the stock is $16 per share. Instructions Indicate the balances in the stockholders' equity accounts after the stock dividend has been distributed.

The chief accounting officer in a company is known as the

Manning Company has $1,000,000 in assets and $1,000,000 in stockholders' equity, with 50,000 shares outstanding the entire year. It has a return on assets ratio of 9%. In the past year it had net income of $75,000. On January 1, 2014, it issued $300,000 in debt at 5% and immediately repurchased 25,000 shares for $300,000. Management expected that, had it not issued the debt, it would have again had net income of $75,000. Instructions (a) Determine the Company's net income and earnings per share for 2013 and 2014. (Ignore taxes in your computations.) (b) Compute the Company's return on common stockholders' equity for 2013 and 2014. (c) Compute the company's debt to assets ratio for 2013 and 2014.

Racer Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, Racer's total paid-in capital was

A liability arises when the board of directors declares a stock dividend.

If no-par stock is issued without a stated value, then

The board of directors must assign a per share value to a stock dividend declared that is

A corporation is not an entity that is separate and distinct from its owners.

If the board of directors authorizes a $100,000 restriction of retained earnings for a future plant expansion, the effect of this action is to