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Exam 13: Corporations: Organization, stock Transactions, and Dividends

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Question 31

Multiple Choice

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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 second year.

A) $25,000
B) $10,000
C) $0
D) $30,000

E) All of the above
F) A) and B)

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Question 32

Multiple Choice

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For the current year ended, ABC had the following transactions: ​ Issued 10,000 shares of $2 par common stock for $12 per share.Issued 3,000 shares of $50 par, 6% preferred stock for $70 per share.Purchased 1,000 shares of previously issued common stock for $15 per share.Reported net income of $200,000. Declared and paid a total dividend of $40,000. ​ Assume that retained earnings had a beginning balance of $75,000. Match the following amounts to the appropriate term (a-h) . ​ -$150,000

A) Treasury stock
B) Retained earnings
C) Preferred stock
D) Excess of issue price over par (preferred)
E) Common stock
F) Total paid-in capital
G) Excess of issue price over par (common)
H) Total stockholders' equity

I) A) and G)
J) B) and D)

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Question 33

Multiple Choice

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Oregon,Inc.reported net income of $105,000.During the current year,the company had 5,000 shares of $100 par,5% preferred stock and 10,000 shares of $5 par common stock outstanding.Oregon's earnings per share is

How is treasury stock shown on the balance sheet?

The par value of common stock must always be equal to its market value on the date the stock is issued.

Match each of the following stockholders' equity concepts to the appropriate term (a-h) . -Corporate income distributed to stockholders

If Dakota Company issues 1,500 shares of $6 par common stock for $75,000,

The authorized stock of a corporation

Match each of the following stockholders' equity concepts to the appropriate term (a-h) . -Creditors cannot pursue stockholders' personal assets to satisfy claims

Under the Internal Revenue Code,corporations are required to pay federal income taxes.

Match each of the following stockholders' equity concepts to the appropriate term (a-h) . -The day of the event that creates a liability to company

If a company has preferred stock,the preferred stock dividend is added to net income when computing earnings per common share.

While some businesses have been granted charters under state laws,most businesses receive their charters under federal laws.

A company has 10,000 shares of $10 par common stock outstanding.Prepare entries to record the following:

Match each of the following stockholders' equity concepts to the most appropriate term (a-h) . -The account used to record the difference when issue price exceeds par value of stock

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 30,000 shares were originally issued and 5,000 were subsequently reacquired.What is the number of shares outstanding?

Cash dividends are normally paid on shares of treasury stock.

A corporation has 10,000 shares of $100 par stock outstanding.If the corporation issues a 5-for-1 stock split,the number of shares outstanding after the split will be 40,000.

A company had the following stockholders' equity information available at year-end:​Issued 11,000 shares of $2 par common stock for $12 per share.Issued 5,000 shares of $50 par,6% preferred stock for $70 per share.Purchased 1,000 shares of previously issued common stock for $15 per share.Reported net income of $200,000.Declared and paid the preferred stock dividend.​Calculate the earnings per share for the current year.

Cash dividends become a liability to a corporation on the date of record.