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Exam 13: Accounting for Corporations

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Question 31

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Given the following information about a corporation's current year activities, compute the retained earnings for the current year.

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Question 32

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A corporation's distribution of additional shares of its own stock to its stockholders without the receipt of any payment in return is called a:

A) Stock dividend.
B) Stock subscription.
C) Premium on stock.
D) Discount on stock.
E) Treasury stock.

F) A) and B)
G) A) and C)

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Question 33

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The number of shares that a corporation's charter allows it to sell is referred to as:

Minimum legal capital requirements are intended to protect creditors by requiring a minimum level of legal minimum.

A company paid $2.10 in dividends. Its earnings per share is $5.40, and its stock price is $120 per share. The dividend yield equals 38.9%. $2.10/$120 = 1.75%

A corporation paid a cash dividend of $0.07 per share during the current year. It had 550,000 common shares outstanding at year-end, its current year earnings per share was $3.85, and the stock's year-end market price was $17.50 per share. Calculate the company's dividend yield.

A corporation was formed on January 1. The corporate charter authorized 100,000 shares of $10 par value common stock. During the first month of operation, the corporation issued 300 shares to its attorneys in payment of a $5,000 charge for drawing up the articles of incorporation. The entry to record this transaction would include:

Stock is attractive to investors because stockholders are not liable for the corporation's actions and debts and because stock is easily transferred.

When preferred stock is cumulative and the directors either do not declare a dividend to preferred stockholders or declare one that does not cover the total amount of cumulative dividends, the unpaid amount is called __________________________.

The statement of changes in stockholders' equity:

A liability for dividends exists:

A company reported earnings per share of $9.75, paid a $6.00 cash dividend per share to preferred shareholders, and paid a $0.54 cash dividend per share to common shareholders. There were 1,000 shares of preferred stock outstanding and 6,000 shares of common stock outstanding during the year, and the market price per share of common stock was $45. Calculate the company's dividend yield for common stock.

The following selected transactions took place during the current year for a company: (a) Prepare the journal entries for these transactions. (b) If Retained Earnings had a $75,000 credit balance on January 1, calculate its year-end balance as of December 31.

Common stock always carries a preference for receiving dividends over preferred stock.

A company issued 7% preferred stock with a $100 par value. This means that:

Dividend yield is defined as the market price per share of a company's stock divided by its earnings per share.

A stock dividend is a distribution of corporate assets that returns part of the original investment to shareholders.

A corporation declared and issued a 15% stock dividend on November 1. The following information was available immediately prior to the dividend: The amount that contributed capital will increase (decrease) as a result of recording this stock dividend is:

Unpaid and undeclared preferred dividends are called dividends in arrears.

A corporation can issue two kinds of stock - common and preferred.