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Exam 10: Stockholders Equity

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Question 71

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All treasury stock is outstanding.

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Question 72

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On June 1, a board of directors declared a $3 per share cash dividend, payable on June 30 to all common stockholders of record on June 15. The company has 10,000 shares of common stock authorized, 1,000 shares issued, and 200 shares in the treasury. The entry to record the dividend declaration increases

A) a liability account by $2,400.
B) an asset account by $3,000.
C) an expense account by $2,400.
D) a stockholders' equity account by $3,000.

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Question 73

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Match the terms to the definitions. a.authorized shares i.stock option b.issued shares j.stock warrant c.outstanding shares k.treasury stock d.par value l.call provision e.stated capital (legal capital) m.earnings per share f.preemptive right n.dividend yield ratio g.retained earnings o.dividend payout ratio h.stock split -A measure of the proportion of dividends to earnings.

Refer to LaFarge North America. What is the amount of retained earnings?

Match the following terms to their correct definition. a.Articles of incorporation i.Equity b.Common stock j.Exercise (strike)price c.Contributed capital k.Liquidating dividend d.Corporate charter l.No-par stock e.Current dividend preference m.Payment date f.Date of record n.Preferred stock g.Declaration date o.Prior period adjustment h.Dividends in arrears p.Return on common equity -Date on which shareholders receive dividends that have been declared.

A corporation has 10,000 shares of $5 par common stock authorized but only 8,000 shares issued and outstanding. In the space provided, indicate the effect of the following dividend transactions (shown in chronological order)on each account listed by writing the amount and whether the account would be debited or credited. For any instances where there is no effect on the account, place N/A in the space.

Match the terms to the definitions. a.authorized shares i.stock option b.issued shares j.stock warrant c.outstanding shares k.treasury stock d.par value l.call provision e.stated capital (legal capital) m.earnings per share f.preemptive right n.dividend yield ratio g.retained earnings o.dividend payout ratio h.stock split -A measure of the proportion of common stock dividends to the stock price.

Which of the following is false regarding stock warrants?

Stated capital is the amount of capital that, under law, cannot be returned to the corporation's owners except upon liquidation.

The statement of stockholders' equity shows an $8,000 increase in the common stock account, a $22,000 increase in the paid-in capital in excess of par--common stock account, and a $100,000 increase in retained earnings. If the common stock has a par value of $3 and dividends of $10,000 were declared and paid during the year, what is the amount of net income for the year?

What is treasury stock and how is it reported in the financial statements?

Which of the following statements is true regarding a corporation's purchase of treasury stock?

A corporation may become chartered by applying to the federal government.

An appropriation of retained earnings is best described as a(n)

The ____________________ ratio is computed by subtracting the dividend payout ratio from the total payout ratio.

What is the primary reason for a stock split?

MATCHING -The preferred stock feature which provides the right to dividend in arrears.

____________________ represents the owners' claims against the assets of a corporation after deducting all liabilities.

When computing the dividend payout ratio, net income is divided by the common stock dividends.

A particular balance sheet includes the following information within the stockholders' equity section: Assume that common stock is the only class of stock that has been issued and that there have been two issues of stock since the corporation began business. What is the average issue price per share of stock?