FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 11: Reporting and Analyzing Equity

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Multiple Choice

Review LaterAdd Note

Review Later

Hutter Corporation declared a $0.50 per share cash dividend on its common shares. The company has 20,000 shares authorized, 9,000 shares issued, and 8,000 shares of common stock outstanding. The journal entry to record the dividend declaration is:

A) Debit Retained Earnings $4,000; credit Common Dividends Payable $4,000.
B) Debit Common Dividends Payable $4,000; credit Cash $4,000.
C) Debit Retained Earnings $4,500; credit Common Dividends Payable $4,500.
D) Debit Common Dividends Payable $4,500; credit Cash $4,500.
E) Debit Retained Earnings $10,000; credit Common Dividends Payable $10,000.

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

Correct Answer

verified

Show Answer

Question 62

Multiple Choice

Review LaterAdd Note

Review Later

Prior to June 30, a company has never had any treasury stock transactions. A company repurchased 100 shares of its $1 par common stock on June 30 for $40 per share. On July 20, it reissued 50 of these shares at $46 per share. On August 1, it reissued 20 of the shares at $38 per share. What is the journal entry necessary to record the reissuance of treasury stock on July 20 using the cost method?

A) Debit Common Stock $2,300; credit Cash $2,300.
B) Debit Common Stock $20; debit Treasury Stock $2,290; credit Cash $2,300.
C) Debit Common Stock $2,300; credit Treasury Stock $2,000; credit Paid-In Capital, Treasury Stock $300.
D) Debit Cash $2,300; credit Paid-in Capital, Treasury Stock $300; credit Treasury Stock $2,000.
E) Debit Cash $2,300; credit Treasury Stock $2,300.

F) A) and D)
G) A) and C)

Correct Answer

verified

Show Answer

Question 63

True/False

Review LaterAdd Note

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

Corporations may buy back their own stock for any of the following reasons except to:

Book value per share reflects the value per share if a company is liquidated at balance sheet amounts.

Cumulative preferred stock has a right to be paid both current and prior periods' unpaid dividends before any dividend is paid to common shareholders.

If the dividends declared are not recorded as a reduction to Retained Earnings on the date of declaration, the Dividends account is closed to Retained Earnings at the end of the accounting period.

A company issued 60 shares of $100 par value common stock for $7,000 cash. The journal entry to record the issuance is:

Dividing stockholders' equity applicable to common shares by the number of common shares outstanding yields the book value per common share.

Pickler Corporation is authorized to issue 2,500,000 shares of $1 par common stock. Prepare journal entries to record the following selected transactions that occurred during this year:

The total amount of cash and other assets received by a corporation from its stockholders in exchange for its stock is:

The cumulative net income and loss not distributed as dividends to a corporation's shareholders is called ______________________.

Dividend yield is defined as the annual cash dividends per share divided by the market price per share of a company's stock.

Corporations issue preferred stock to raise capital without sacrificing control of the corporation and/or to boost the return earned by common shareholders.

Stocks that pay relatively large cash dividends on a regular basis are called:

Percy 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 400 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:

Changes in retained earnings are commonly reported in the:

A company reports the following stockholders' equity. Compute the (1) number of common shares outstanding and (2) book value per common share.

Shaw Corporation reported stockholders' equity on December 31 of the prior year as follows: The following selected transactions occurred during the current year: Prepare a statement of retained earnings as of December 31 of the current year.

The term "restricted retained earnings" refers to statutory but not contractual restrictions.