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Exam 11: Reporting and Analyzing Equity

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Question 91

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A stock _________________ keeps stockholder records and prepares official lists of stockholders for stockholder meetings and dividend payments.

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Question 92

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A stock ____________________ assists with purchases and sales of shares of stock by receiving and issuing certificates as necessary.

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Question 93

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A company has net income of $3,000,000.It has 600,000 weighted-average common shares outstanding and a price-earnings ratio of 17.What is the market value per share of this company's stock?

An amount of assets defined by state law that stockholders must invest and leave invested in a corporation is called the:

_______________________________ is the total amount of cash and other assets received by the corporation from its stockholders in exchange for common stock.

Identify and discuss the key differences between common and preferred stock.

A corporation reported net income of $3,730,000 and paid preferred cash dividends of $100,000 during the current year.There were 600,000 shares of common stock outstanding and the market price per common share was $88.33 at year-end.Calculate the company's price-earnings ratio.

Match each definition with its term

_____________ is the amount of income earned per share of a company's outstanding common stock.

A company had net income of $250,000.On January 1,there were 12,000 shares of common stock outstanding.On May 1,the company issued an additional 9,000 shares of common stock.The company declared a $7,900 dividend on its noncumulative,nonparticipating preferred stock.There were no other stock transactions.The company had an earnings per share of:

A dividend preference for preferred stock means that:

Match each of the following terms with the appropriate definitions.

A company had the following stockholders' equity on January 1: $\begin{array}{|l|r|}\hline \begin{array}{l}\text { Common stock }-\$ 1 \text { par value; } 1,200,000 \text { shares authorized, } 400,000 \\\text { shares issued and outstanding }\end{array} & \$ 400,000 \\\hline \text { Contributed capital in excess of par value, common stock } & 300,000 \\\hline \text { Retained earnings } & \$ 1,064,000 \\\hline \text { Total stockholders' equity } & \$ 364,000 \\\hline\end{array}$ On January 10,the company declared a 40% stock dividend to holders of record on January 25,to be distributed January 31.The market value of the stock on January 10 prior to the dividend was $20 per share.What is the book value per common share on February 1?

A company has 1,000 shares of $100 par preferred stock.It also has 25,000 shares of common stock outstanding and its total stockholders' equity equals $500,000.The book value per common share is:

No-par stock to which the directors assign a value per share is called _______________________.

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

The board of directors of a corporation:

Preferred stock that the issuing corporation at its option may retire by paying a specified amount to the preferred stockholders plus any dividends in arrears is called:

Prior to June 1,a company has never had any treasury stock transactions.The company repurchased 100 shares of its common stock on June 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 Contributed Capital,Treasury Stock account on August 2?

A corporation received its charter and began business this year.The company is authorized to issue 50,000 shares of $100 par,10%,noncumulative,nonparticipating preferred stock and 500,000 shares of no-par common stock.The following selected transactions occurred during this year: $\begin{array} { | l | l | } \hline \text { Apr. } 5 & \text { Issued 250 shares of preferred stock for } \$ 104 \text { cash per share } \\\hline \text { June } 15 & \begin{array} { l } \text { Exchanged } 750 \text { shares of common stock for } \$ 15,000 \text { in legal Services incurred in } \\\text { the orgarization of the company. }\end{array} \\\hline\end{array}$ Prepare journal entries to record these transactions.