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Exam 13: Accounting for Corporations

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Question 51

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A company has $100,000 of 10% noncumulative,nonparticipating,preferred stock outstanding,and $150,000 of common stock outstanding.In the company's first year of operation,no dividends were paid,but during the second year,it paid cash dividends of $25,000.Compute the dividends to be distributed to (1)preferred shares and (2)common shares.

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(1)Preferred: 10% x ...

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Question 52

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_______________________ are responsible for and have final authority for managing a corporation's activities.

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The board ...

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Question 53

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

Preferred stock with a feature allowing preferred stockholders to share with common shareholders in any dividends in excess of the percent or dollar amount stated on the preferred stock is called:

The statement of changes in stockholders' equity:

A class of stock that does not have a par value,and can usually be issued at any price without creating a minimum legal capital deficiency,is called:

A corporation had current year net income of $2,375,000.It paid preferred dividends of $80,000 cash and had 500,000 weighted-average shares of common stock outstanding.Calculate the corporation's earnings per share.

Purchasing treasury stock reduces the corporation's assets and stockholders' equity by equal amounts.

Explain how to calculate the price-earnings ratio and describe how it is used in analysis of a company's financial condition and performance.

Dividend yield is computed by dividing annual cash dividends per share by the market value per share.

A company was organized in January 2012 and has 2,000 shares of $100 par value,10%,nonparticipating preferred stock outstanding and 30,000 shares of $10 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.

Stated value stock is par stock that is assigned a value per share by the corporation's board of directors.

Common shareholders always share equally with all other shareholders in all dividends.

A corporation's minimum legal capital is established by recording the par or stated value of the number of shares:

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

A common statutory restriction is reported on the income statement whereas; a common contractual restriction is reported in the stockholders' equity section of the balance sheet.

Retained earnings:

A stock split increases total stockholders' equity.

The date the directors vote to pay a dividend is called the:

________________ is a class of stock assigned a value by the corporation in its charter.