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Exam 11: Reporting and Analyzing Equity

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Question 41

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Fargo Company's outstanding stock consists of 400 shares of noncumulative 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 year 1 is:

A) $200 preferred; $19,800 common.
B) $4,000 preferred; $16,000 common.
C) $17,000 preferred; $3,000 common.
D) $10,000 preferred; $10,000 common.
E) $20,000 preferred; $0 common.

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

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Question 42

Multiple Choice

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The following data were reported by a corporation: The number of outstanding shares is:

A) 12,000.
B) 15,000.
C) 17,000.
D) 20,000.
E) 23,000.

F) A) and B)
G) All of the above

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Question 43

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Prior to September 30,a company has never had any treasury stock transactions.A company repurchased 1,000 shares of its $2 par common stock on September 30 for $20 per share.On October 2,it reissued 400 of these shares at $21 per share.On October 12,it reissued the remaining 600 shares at $19 per share.The journal entry to record the purchase of the shares on September 30 would be:

Mayan Company had net income of $132,000.The weighted-average common shares outstanding were 80,000.The company has no preferred stock.There were no other stock transactions.The company's earnings per share is:

Small stock dividends are recorded at market value.

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

The stockholders' equity section of a corporation's balance sheet follows: (1)Assuming that no dividends are in arrears,compute the book values per preferred share and per common share. (2)Assuming that one year of cumulative preferred dividends is in arrears,compute the book values per preferred share and per common share.

A stock split is the distribution of additional shares of stock to stockholders according to their percent of ownership.

Prior to September 30,a company has never had any treasury stock transactions.A company repurchased 1,000 shares of its $2 par common stock on September 30 for $20 per share.On October 2,it reissued 400 of these shares at $21 per share.On October 12,it reissued the remaining 600 shares at $19 per share.The journal entry to record the reissuance of the shares on October 12 would be:

The number of shares that a corporation's charter allows it to sell is the ________ stock.

Stocks that pay relatively large cash dividends on a regular basis are called:

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

A company's stock is selling for $35.70 per share at year-end.This current year it paid shareholders a $1.43 per share cash dividend,reported earnings per share of $11.00,and had 750,000 common shares outstanding at year-end.Calculate the company's dividend yield.

The statement of changes in stockholders' equity:

A liquidating dividend is:

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

A company has earnings per share of $6.50.Its dividend per share is $0.50,and its market price per share is $80.Its price-earnings ratio equals 13.

Percy Corporation was formed on January 1.The corporate charter authorized 100,000 shares of $10 par value common stock.During the first month of operation,the corporation issued 400 shares to its attorneys in payment of a $5,000 charge for drawing up the articles of incorporation.The entry to record this transaction would include:

A proxy is a document that gives a designated agent the right to vote a shareholder's stock.

A company has 50,000 shares of common stock outstanding.The stockholders' equity applicable to common shares is $1,470,000,and the par value per common share is $5.The book value per share is: