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

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Question 71

True/False

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A corporation has 10,000 shares of $100 par value 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) True
B) False

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Question 72

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Which of the following is the appropriate general journal entry to record the declaration of a cash dividends?

A) Retained earnings Cash
B) Cash Dividends payable Cash
C) Paid-in capital Cash Dividends payable
D) Cash Dividends Cash Dividends Payable

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

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Question 73

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The cost method of accounting for the purchase and sale of treasury stock is a commonly used method.

Marcos Company,which had 35,000 shares of common stock outstanding,declared a 4-for-1 stock split. Required:

A corporation purchased 1,000 shares of its $5 par common stock at $10 and subsequently sold 500 of the shares at $20.What is the amount of revenue realized from the sale?

When the board of director's declares a cash or stock dividend,this action decreases retained earnings.

Which of the following statements concerning taxation is accurate?

A restriction/appropriation of retained earnings

The term deficit is used to refer to a debit balance in which of the following accounts of a corporation?

Future Sources,Inc.reported the following results for the year ending July 31,2012: Prepare a retained earnings statement for the fiscal year ended July 31,2012.

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

In which section of the financial statements would Paid-In Capital from Sale of Treasury Stock be reported?

A sale of treasury stock may result in a decrease in paid-in-capital.All decreases should be charged to the Paid-In-Capital from Sale of Treasury account.

The ability of a corporation to obtain capital is

The amount of a corporation's retained earnings that has been restricted/appropriated should be reported in the notes to the financial statements.

A corporation has 50,000 shares of $28 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

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 45,000 shares were originally issued and 5,000 were subsequently reacquired.What is the amount of cash dividends to be paid if a $2 per share dividend is declared?

Cash dividends are normally paid on shares of treasury stock.

When Bayou Corporation was formed on January 1,20xx,the corporate charter provided for 100,000 share of $10 par value common stock.The following transaction was among those engaged in by the corporation during its first month of operation: The corporation issued 9,000 shares of stock at a price of $23 per share. The entry to record the above transaction would include a

The par value per share of common stock represents