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Exam 11: Corporations: Organization, Stock Transactions, and Dividends

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Question 21

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The date on which a cash dividend becomes a binding legal obligation is on the

A) declaration date.
B) date of record.
C) payment date.
D) last day of the fiscal year end.

E) None of the above
F) A) and B)

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Question 22

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On March 4, of the current year, Barefoot Bay, Inc. reacquired 5,000 shares of its common stock at $89 per share. On August 7, Barefoot Bay sold 3,500 of the reacquired shares at $100 per share. The remaining 1,500 shares were sold at $88 per share on November 29. Required:

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Question 23

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A stock split results in a transfer at market value from retained earnings to paid-in capital.

Sabas Company has 40,000 shares of $100 par, 1% preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends: Determine the dividends per share for preferred and common stock for each year.

A corporation has 10,000 shares of $100 par value stock outstanding. If the corporation issues a 5-for-1 stock split, the number of shares outstanding after the split will be 40,000.

A company has 10,000 shares of $10 par common stock outstanding. Prepare entries to record the following:

Alma Corp. issues 1,000 shares of $10 par value common stock at $16 per share. When the transaction is recorded, credits are made to:

Treasury stock should be reported in the financial statements of a corporation as a(n)

Indicate whether the following actions would (+) increase, (-) decrease, or (0) not affect a company's total assets, liabilities, and stockholders' equity.

Before a stock dividend can be declared or paid, there must be sufficient cash.

Paid-in capital may originate from real estate donated to the corporation.

If common stock is issued for an amount greater than par value, the excess should be credited to

A corporation has 50,000 shares of $28 par value stock outstanding that has a current market value of $150. If the corporation issues a 4-for-1 stock split, the market value of the stock will fall to approximately

The amount of a corporation's retained earnings that has been restricted/appropriated should be reported in the notes to the financial statements.

Wonder Sales is authorized to issue 100,000 shares of $100 par, 2% preferred stock and 1,000,000 shares of $10 par common stock. (a) On January 2nd, Wonder Sales issues 5,000 shares of preferred stock for $107 per share and 65,000 shares of common stock at $10 per share. Journalize this issuance. (b) On January 25th, Wonder Sales issued 250 shares of preferred stock to a Morton Law Firm for settlement of an invoice for incorporation services. The invoice was for $36,000. Journalize this issuance. (c) On January 31st, Wonder Sales issues 500 shares of common stock to Setup Inc. for fixtures. The fixtures have a fair market value of $6,500. Journalize this issuance.

Treasury stock which was purchased for $3,000 is sold for $3,500. As a result of these two transactions combined

The day on which the board of directors of the corporation distributes a dividend is called the declaration date.

How is treasury stock shown on the balance sheet?

The liability for a dividend is recorded on which of the following dates?

A large public corporation normally uses registrars and transfer agents to maintain records of the stockholders.