ACCT 202 Chapter Notes - Chapter 11: Dividend, Legal Personality, Preferred Stock

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cyangnat375

4 Apr 2016

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The number of shares issued * par value per share in the common stock account. The remainder is assigned to paid-in capital in excess of par value, The number of shared issued * the par value per share in the comon stock account. The remainder is assigned to paid-in capital in excess of par, common. To pay a cash dividend, the corporation must have: Date of payment (record payment of cash to stockholder) Shared of its own stock to its stockholders without receiving any payment in return. Can be used to keep the market price of the stock affordable. Can provide evidence of mgmt"s confidence that the company is doing well. Shares of stock to stockholders according to their ownership percentage. When this occurs the corp calls in the outstanding shares and issues new shares of stock. In this process the par value of the stock changes. A separated class of stock, typically having priority over common shares in .

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POSTING QUESTION INVOLVING : Journalizing issuance of stock andpreparing the stockholders equity section of the balance sheet

Known History: As of March 23-Common Stock $690

The Charter of Trugreen Corporation authorizes the issuance of900 shares of preferred stock and 1,400 shares of common stock.During a two-month period Trugreen completed these stock-issuancetransactions:

Mar 23 Issued 230 shares of $3 par value common stock for cashof $15 per share.

April 12 Received inventory with a market value of $27,000 andequipment with a market value of $19,000 for 320 shares of the $3par value common stock.

April 17 Issued 900 shares of 5%, $20 par value preferred stockfor $20 per share.

Required to figure out two things

Record the transactions in the general journal by Date, Accountsand Explanations, Debits, and credits

Prepare the stockholders equity section of the Trugreen balancesheet as of April 30, 2018, for the transactions in this exerciseRetained Earnings has a balance of $73,000 at April 30th.

Balance Sheet Partial (NOT SURE IF THE DATE, NAME, OR $ AMOUNTSHOULD BE ABOVE THIS)

then Stockholder's equity (AGAIN NOT SURE WHAT SHOULD BE ABOVETHIS)

Paid In Capital: Preferred Stock , 5% , $20 par value ; 900shares authorized, issued and outstanding= AMOUNT?

Common stock --$3 Par Value ; 1,400 shares authorized, 550shares issued and outstanding = AMOUNT?

Paid-in captial in Excess of par-Common=AMOUNT?

total paid in capital=AMOUNT?

Retained Earnings=AMOUNT?

Total stockholders Equity=AMOUNT?

blushsea-lion940

Match each of the following stockholders' equity concepts to themost appropriate term (a - h)

. a. authorized shares

b. issued shares

c. outstanding shares

d. par value

e. common stock

f. preferred stock

g. Paid-In Capital in Excess ofPar

1. The account used to record thedifference when issue price exceeds par value of stock

2. The dollar amount assigned toeach share of stock

3. The number of shares currentlyheld by stockholders

4. A class of stock having firstrights to dividends of a corporation

5. The maximum number of shares acompany can issue to shareholders

6. The number of shares sold tostockholders

7. A class of stock that providesno preference rights to shareholders

byzantiumsnake275

1. The effect of a stock dividend is to

Question 17 options:

change the composition of stockholders' equity.

increase the book value per share of common stock.

decrease total assets and stockholders' equity.

decrease total assets and total liabilities

2. Regular dividends are declared out of:

	Common Stock.
	Treasury Stock.
	Retained Earnings.
	Paid-in Capital in Excess of Par.

3. Solaris, Inc. has 2,000 shares of 5%, $10 par value,cumulative preferred stock and 50,000 shares of $1 par value commonstock outstanding at December 31, 2014. What is the annual dividendon the preferred stock?

Question 20 options:

$5 per share

$10,000 in total

$1,000 in total

$.05 per share

4. Corporations generally issue stock dividends in order to

Question 21 options:

decrease the amount of capital in the corporation.

increase the market price per share.

exceed stockholders' dividend expectations.

increase the marketability of the stock.

5. A stockholder who receives a stock dividend would

Question 22 options:

expect the par value of the stock to change.

own more shares of stock.

expect retained earnings to increase.

expect the market price per share to increase.

6. When stock dividends are distributed,

Question 23 options:

	Retained Earnings is decreased.
	Common Stock Dividends Distributable is decreased.
	no entry is necessary if it is a large stock dividend.
	Paid-in Capital in Excess of Par is debited if it is a smallstock dividend.

Identify the effect the declaration and distribution of a stockdividend has on the par value per share.

Question 24 options:

No effect

Increase or decrease

Increase

Decrease

A stock split

Question 25 options:

will have no effect on the par value per share of stock.

will increase the total par value of the stock.

will increase total paid-in capital.

may occur in the absence of retained earnings.

On January 1, Sly Corporation had 120,000 shares of $10 parvalue common stock outstanding. On March 17, the company declared a15% stock dividend to stockholders of record on March 20. Marketvalue of the stock was $13 on March 17. The entry to record thetransaction of March 17 would include a

Question 26 options:

debit to Common Stock Dividends Distributable for $180,000.

credit to Cash for $234,000.

credit to Stock Dividends for $54,000.

credit to Common Stock Dividends Distributable for $180,000.

Bento, Inc. had 500,000 shares of common stock outstandingbefore a stock split occurred, and 1,500,000 shares outstandingafter the stock split. The stock split was

Question 27 options:

1-for-5.

2-for-5.

5-for-1.

3-for-1.

In the stockholders' equity section of the balance sheet,

Question 28 options:

Dividends in arrears will appear as a restriction of RetainedEarnings.

Common Stock Dividends Distributable will appear in its ownsubsection of the stock- holders' equity.

Common Stock Dividends Distributable will be classified as partof additional paid-in capital.

Additional Paid-in Capital appears under the subsection Paid-inCapital.

During 2014 Miami Inc. had sales revenue $1,328,000, grossprofit $728,000, operating expenses $398,000, cash dividends$90,000, other expenses and losses $40,000. Its corporate tax rateis 30%. What was Miami's income tax expense for the year?

Question 29 options:

$87,000

$398,400

$180,000

$60,000

Paiva Corporation splits its common stock 2 for 1, when themarket value is $80 per share. Prior to the split, Paiva had100,000 shares of $10 par value common stock issued andoutstanding. After the split, the par value of the stock

Question 30 options:

	remains the same.
	is reduced to $5 per share.
	is reduced to $2 per share.
	is reduced to $20 per share.

periwinklejellyfish203

ACCT 202 Chapter Notes - Chapter 11: Dividend, Legal Personality, Preferred Stock

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