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Exam 8: Proprietorships, partnerships, and Corporations

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Question 51

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Griggs Company reissued 100 shares of its treasury stock.Griggs had purchased the stock for $25 per share and reissued it for $35 per share.Select the answer that accurately reflects how the reissue of the treasury stock would affect Griggs' financial statements.

A) Choice A
B) Choice B
C) Choice C
D) Choice D

E) C) and D)
F) A) and C)

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Question 52

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Fredericksburg Corporation had issued and outstanding 150,000 shares of $8 par value common stock at January 1,2012 with a retained earnings balance of $750,000.Fredericksburg issued a 12% stock dividend to its common shareholders.At the time of the dividend,the market value of the stock was $17 per share. Required: a)What is the total dollar amount of the stock dividend? b)Describe how the stock dividend will affect Fredericksburg's stockholders' equity accounts. c)How many shares of common stock are outstanding after the stock dividend?

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a)Stock Dividend: 150,000 shares x 12% =...

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Question 53

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Bridge Corporation decides to issue a 15% stock dividend on 20,000 outstanding shares of $10 stated value common stock.The distribution is made at the time the market value of the stock is $50 a share.How will this transaction affect the company's equity accounts?

Davis Corporation had 25,000 shares of $10 par value common stock outstanding and declared a two-for-one stock split.How many shares of stock would then be outstanding and what would be the par value of the new stock?

Proprietorships are not separate legal entities; their earnings are taxable to the owners and not to the business itself.

Determine the dollar amount to be transferred from Retained Earnings to paid-in capital accounts as a result of the stock dividend.

The term "double taxation" refers to which of the following:

Which describes the stockholders' equity account created when a corporation purchases its own stock and holds it for reissue?

Stock of a closely-held corporation does not trade on a stock exchange.

What effect will the declaration of the dividend have on Garrison's financial statements?

A corporation must record a liability for cash dividends on the date of record.

At the end of the accounting period,Isaac Company had a balance of $4,000 in its common stock account,additional paid in capital of $4,000,retained earnings of $3,000,and $1,000 of treasury stock.The total amount of stockholders' equity is:

On September 11,2012,the Hafar Corporation has unrestricted Retained Earnings of $6,000,000,Appropriated Retained Earnings of $4,000,000,Cash of $7,500,000,and Accounts Payable of $500,000.What is the maximum amount that the corporation could use for cash dividends on that date?

The Securities and Exchange Commission was established in response to the accounting scandals that occurred in 2001 and 2002.

The par value of common stock

Describe cumulative preferred stock.

Which of the following statements about types of business entities is true?

Purchase of treasury stock would be shown on the statement of cash flows as

Will the number of shares of stock issued and the number of shares of stock outstanding always be the same? Why or why not?

Explain how the equity section of a balance sheet differs among sole proprietorships,partnerships and corporations.