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29 Cards in this Set
- Front
- Back
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Dawson Comp is authorizing to issue 70,000 shares of $2 par common stock. On Nov 30, 2014, Dawson issued 10,000 shares at $22 per share. Dawsons journal entry to record these facts should include a? |
A credit to common stock for $20,000 |
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How do you find shares of common stock? |
Common stock issued / $amount per par |
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How do you find total paid in capital? |
Add common stock, preferred stock, and paid in capital in excess of par - common |
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How do you find Total stock holders equity? |
Add the paid in capital (what we calculated above C + P + P) and add that to Retained Earnings *if there is treasury stock you subtract that! |
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Trigg Corp purchased treasury stock in 2014 at a price of $22 per share and resold the treasury stock in 2015 at a price of $42 per share. What amount should Trigg report on its income statement for 2015? |
0$ |
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Are Discount Bonds Payable seen in the stock holders equity section of a corpora rtes balance sheet? |
No |
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The purchase of treasury stock ? |
Decreases total assets AND total stockholders equity |
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When does a cash dividend become a legal liability? |
On date of declaration |
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When do dividends increase stockholders equity? |
NEVER |
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Elm Tree Mall, Inc., has 3,000 shares of 5%, $40 par cumulative preferred stock and 140,000 shares of $1 par common stock outstanding. At the beginning of the current year, preferred dividends were 4 years in arrears. Elm Tree's board of directors wants to pay a $1.50 cash dividend on each share of outstanding common stock in the current year. To accomplish this, what total amount of dividends must Elm Tree declare? |
Issued shares x Par value per share x dividend rate x years = preferred dividends = 3,000 x $40 x .05 x 5 = 30,000 issued shares x dividend rate = common dividends =140,000 x 1.50 = 210,000 add the two together and wah la! =240,000 |
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Stock dividends... |
Have NO affect on stockholders equity |
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What is the effect of a stock dividend and a stock split on TOTAL ASSETS? |
BOTH have no effect |
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A 2-for-1srock split has the same effect on the number of shares being issued as a... |
$100 stock dividend |
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The numerator for computing the rate of return on total assets is... |
Net income minus preferred dividends |
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The denominator for computing the rate of return on equity is... |
average common stockholders equity |
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Which of the following is a characteristic of a corporation? a. limited liability to stockholders b. mutual agency c. no income tax d. both b & c |
a. Limited liability to stockholders |
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Par value... |
Is an arbitrary amount that establishes the legal capital for each share |
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The paid-in capital portion of stockholders' equity does not include... |
Retained Earnings |
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Preferred stock is least likely to have which of the following characteristics? |
preference as to voting It DOES have preference as to dividends, preference as to assets on liquidation on the corporation, the right of the holder to convert to common stock |
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What classification represents the most shares of common stock? |
Authorized shares |
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When treasury stock is sold for less than its cost, the entry should include a debit to... |
Retained Earnings |
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A company purchased 100 shares of its common stock 49$ per share. Its sells 75 of the treasury shares at 58$ per share. The entry to sell the treasury stock includes a... |
CREDIT to Paid in capital from Treasury Stock Transactions for $675 |
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Stockholders are eligible for a dividend if they own the stock on the date of... |
Record |
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A corporation has 50,000 shares of 1% preferred stock outstanding. Also, there are 50,000 shares of common stock outstanding. Par value for each is $100. If a $450,000 dividend is paid, how much goes to the preferred stockholders? |
# of preferred shares x preferred stock par value x annual dividend % = preferred dividend 50,000 x 100 x 0.01 = 50,000 |
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A corporation has 50,000 shares of 1% preferred stock outstanding. Also, there are 50,000 shares of common stock outstanding. Par value for each is $100. If a $450,000 dividend is paid, what is the amount of DIVIDENDS per share on common stock?
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Total dividend - preferred dividend = common dividend 450,000 - 50,000 (1% of 50,000 x $100 par value) = 400,000 common dividend / common shares outstanding = common dividends per share 400,000 / 50,000 =8 |
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Which of the following is NOT true about a 10% stock dividend? - total stockholders equity is the same - Paid in capital increases - par value decreases - Retained earnings decreases e. The market value of the stock is needed to record the stock dividend |
Par value decreases |
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A company declares 5% stock dividend. The debit to Retained Earnings is an amount equal to... |
The market value of the shares to be issued |
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Which of the following statements is NOT true about a 3-for-1 stock split? - a stock holder with 10 shares before the split owns 30 shares after the split - par value is reduced to 1/3 of what it was before the split - Retained earnings remains the same - the market price of each stock will decrease - Total stock holders equity increases |
Total stock holders equity increases |
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Golds Company's net income and sales are $38,000 and $900,000, respectively, and average total sales are $250,000. What is Golds return on assets? |
Net income / Average total assets = ROA % 38,000 / 250,000 = 0.152 x 100 = 1.52% |
