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Exam 11: Reporting and Analyzing Equity

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Question 41

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Book value per share:

A) Reflects the value per share if a company is liquidated at balance sheet amounts.
B) Is assets divided by equity.
C) Is assets divided by the number of common shares outstanding.
D) Measures the worth of assets.
E) Is equal to par value per share.

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

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Question 42

Multiple Choice

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Halverstein Company's outstanding stock consists of 7,000 shares of cumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. The amount of dividends paid to preferred and common shareholders in 2018 is:

A) $4,500 preferred; $27,500 common.
B) $3,500 preferred; $28,500 common.
C) $8,000 preferred; $24,000 common.
D) $9,000 preferred; $23,000 common.
E) $1,000 preferred; $31,000 common.

F) B) and C)
G) C) and D)

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Question 43

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The total number of shares outstanding is the authorized stock.

A corporation had current year net income of $237,500. It paid preferred dividends of $40,000 cash and had 480,000 weighted-average shares of common stock outstanding. Calculate the corporation's earnings per share.

A corporation may not legally give shares of its stock to promoters in exchange for their services in organizing the corporation.

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

What are the rights generally granted to common stockholders?

A corporation issued 100 shares of its $5 par value common stock in payment of a $1,800 charge from its accountant for assistance in filing its charter with the state. The entry to record this transaction will include:

Underwood Company's only treasury stock transactions for the current year follow: (1) 2,000 shares of its common stock were purchased on June 1 for $80,000; (2) On July 1 it reissued 500 of these shares at $45 per share; (3) On August 1 it reissued an additional 500 treasury shares at $38 per share. 1) Prepare the journal entries required to record these transactions. 2) Calculate the balance in Paid-in Capital, Treasury Stock, on September 1 assuming its beginning-year balance is zero.

Prior period adjustments to financial statements can result from:

The amount of income earned per share of a company's outstanding common stock is known as:

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

How is the retirement of stock recorded?

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

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 $155,000 credit balance on January 1, calculate its year-end balance as of December 31.

Prior to May 1, Fortune Company has never had any treasury stock transactions. A company repurchased 100 shares of its common stock on May 1 for $5,000. On July 1, it reissued 50 of these shares at $52 per share. On August 1, it reissued the remaining treasury shares at $49 per share. What is the balance in the Paid-in Capital, Treasury Stock account on August 2?

A company's stock is selling for $63.20 per share and its earnings per share is $3.60 for the current year. Calculate the price-earnings ratio.

Fetzer Company declared a $0.55 per share cash dividend. The company has 200,000 shares authorized, 190,000 shares issued, and 8,000 shares in treasury stock. The number of shares to which the dividend applies is:

Preferred stock on which the right to receive dividends is forfeited for any year that the dividends are not declared is referred to as:

Cactus Joe Corporation reported stockholders' equity on January 1 of the current year as follows: Common Stock, $5 par value, 1,000,000 shares authorized, 600,000 shares issued; Paid-in Capital in Excess of Par Value, Common Stock, $1,025,000; Retained Earnings, $1,850,000. Prepare journal entries to record the following transactions: