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Exam 11: Reporting and Analyzing Equity

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Question 51

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What is a corporation? Identify the key advantages and disadvantages of corporations.

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A corporation is an entity created by la...

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Question 52

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________ is the annual amount of cash dividends per share distributed to common shareholders relative to the stock's market price.

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Question 53

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Djarleen Company has 10,000 shares of $10 par preferred stock,which were issued at par.It also has 250,000 shares of common stock outstanding,and its total stockholders' equity equals $4,000,000.The book value per common share is:

A large stock dividend only occurs when a distribution of more than 50% of previously outstanding shares is issued.

A stock's price-earnings ratio is based on expectations that can prove to be better or worse than eventual performance.

A company had the following stockholders' equity on January 1: On January 10,the company declared a 40% stock dividend to stockholders of record on January 25,to be distributed January 31.The market value of the stock on January 10 prior to the dividend was $20 per share.What is the book value per common share on February 1?

Sweet Company's outstanding stock consists of 1,000 shares of noncumulative 5% preferred stock with a $100 par value and 10,000 shares of common stock with a $10 par value.During the first three years of operation,the corporation declared and paid the following total cash dividends. The total amount of dividends paid to preferred and common shareholders over the three-year period is:

The declaration of cash dividends increases retained earnings.

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 payment is:

A debit balance in retained earnings is referred to as a retained earnings deficit.

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

Special rights often granted to preferred stock include a preference for receiving dividends and additional voting privileges.

If a company has noncumulative preferred stock,basic earnings per share is equal to net income less preferred dividends declared divided by the number of weighted average common shares outstanding.

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

A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share.The entry to record this transaction would be:

All of the following regarding accounting for Treasury Stock under U.S.GAAP and IFRS is true except:

A company was organized in January 2016 and has 20,000 shares of $10 par value,10%,nonparticipating preferred stock outstanding and 150,000 shares of $2 par value common stock outstanding.It has declared and paid cash dividends each year as shown below.Calculate the total dividends distributed to each class of stockholder under each of the assumptions given.

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

A reverse stock split increases the par or stated value per share of stock.

A registrar keeps stockholder records and prepares official lists of stockholders and dividend payments.