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Exam 11: Corporations: Organization, Stock Transactions, and Dividends

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Question 51

Multiple Choice

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A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8. Subsequently, the company declared a 4% stock dividend on a date when the market price was $12 a share. What is the amount transferred from the Retained Earnings account to Paid-in Capital accounts as a result of the stock dividend?

A) $12,800
B) $19,200
C) $32,000
D) $48,800

E) None of the above
F) A) and B)

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Question 52

Multiple Choice

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Miriah Inc. has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2014. What is the annual dividend on the preferred stock?

A) $50 per share
B) $50,000 in total
C) $10,000 in total
D) $0.50 per share

E) B) and D)
F) B) and C)

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Question 53

Multiple Choice

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

A corporation has 12,000 shares of $20 par value stock outstanding that has a current market value of $150. If the corporation issues a 4-for-1 stock split, the market value of the stock will fall to approximately $50.

Nexis Corp. issues 1,000 shares of $15 par value common stock at $22 per share. When the transaction is recorded, credits are made to:

Which of the following statements is not true about a 2-for-1 split?

A corporation has 50,000 shares of $25 par value stock outstanding. If the corporation issues a 3-for-1 stock split, the number of shares outstanding after the split will be

What is the total stockholders' equity based on the following data?

If common stock is issued for an amount greater than par value, the excess should be credited to

A company had stock outstanding as follows during each of its first three years of operations: 2,500 shares of $10, $100 par, cumulative preferred stock and 50,000 shares of $10 par common stock. The amounts distributed as dividends are presented below. Determine the total and per share dividends for each class of stock for each year by completing the schedule.

A disadvantage of the corporate form of business entity is

Which of the following is not a right possessed by common stockholders of a corporation?

Twenty percent of all businesses in the United States are corporations and they account for 80% of the total business dollars generated.

A 10% stock dividend will increase the number of shares outstanding but the book value per share will decrease.

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: Determine the dividends per share for preferred and common stock for the third year.

Treasury stock should be reported in the financial statements of a corporation as a(n)

When a stock dividend is declared, which of the following accounts is credited?

The ability of a corporation to obtain capital is

The declaration and issuance of a stock dividend does not affect the total amount of a corporation's assets, liabilities, or stockholders' equity.

The entry to record the issuance of 150 shares of $5 par common stock at par to an attorney in payment of legal fees for organizing the corporation includes a credit to