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Exam 11: Stockholders Equity

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Question 21

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Reddy Parts reported the following information at December 31, 2015: Answer the following questions for Reddy Parts by placing the correct response in the space provided. ___________ A) How many shares of common stock are issued? ___________ B) How many shares of preferred stock are issued? ___________ C) How many common shares are outstanding? ___________ D) How many preferred shares are outstanding? ___________ E) How many of the common shares will receive dividends if and when they are paid? ___________ F) How many of the preferred shares will receive dividends if and when they are paid?

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A) 20,000 shares
$40,000 Total) / $2 Par...

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Question 22

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The Retained Earnings account balance for a large corporation is $10,000,000.This amount represents

A) earnings that have not been distributed to shareholders.
B) cash in the bank.
C) the amount of cash available for dividends.
D) revenues for all past years of operations.

E) B) and D)
F) A) and D)

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Question 23

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When a company declares a cash dividend, which of the following is true?

What is the effect of a stock dividend on stockholders' equity?

A ________________ allows the firm to eliminate a class of stock by paying the stockholders a specified amount.

Comprehensive income is

Select the best answer from the list below to complete statements that follow. -The annual dividend amount divided by the annual net income is .

A allows preferred stockholders to share on a percentage basis in the distribution of an abnormally large dividend.

In 2015, Dickens Company had a beginning balance in its Cash Dividend Payable account of $5,000 and an ending balance of $4,000.During 2015, the only dividends Dickens declared were $46,000 in cash to the common stockholders.How much cash was paid to the common stockholders?

Select the best answer from the list below to complete statements that follow. -The maximum number of shares a company may issue are .

Sunnyland Charters reported the following information at December 31, 2015: The number of shares of common stock issued is

Anole Company Anole Company was incorporated as a new business on January 1, 2015.The company is authorized to issue 20,000 shares of $5 par value common stock and 10,000 shares of 6%, $10 par value, cumulative, participating preferred stock.On January 1, 2015, the company issued 8,000 shares of common stock for $15 per share and 2,000 shares of preferred stock for $30 per share.Net income for the year ended December 31, 2015, was $375,000. -Refer to the information about Anole Company. The number of Anole's unissued shares of common stock at December 31, 2015, is

Stock dividends involve the issuance of additional shares of stock.

The stockholders' equity section of Augusta, Inc.is as follows: The market price of the stock on December 31, 2015, was $8 per share.Answer the following independent questions: A) Calculate the average amount at which each share of common stock was initially sold. B) What balance will be in the retained earnings account immediately after the declaration of a 2- for-1 stock split? C) If a cash dividend of $1 per share was declared to both common and preferred stockholders, what would be the balance in retained earnings immediately after the declaration? D) What balance will be in the retained earnings account immediately after the declaration of a 20% common stock dividend on December 31, 2015?

All changes in all stockholders' equity accounts must be shown in the Stockholders' Equity section of the balance sheet.

[APPENDIX] Which of the following statements regarding partnerships is true?

A 2-for-1 stock split increases the par value per share.

Poole Company began business on January 1, 2015.The corporate charter authorized issuance of 5,000 shares of $1 par value common stock, and 4,000 shares of $8 par value, 6% cumulative preferred stock.None of the preferred shares were issued.On July 1, Poole issued 1,000 shares of common stock in exchange for two years rent on a retail location.The cash rental price is $2,400 per month and the rental period begins on July 1.The correct entry to record the July 1 transaction will

Venture Enterprises' accountant determined the following: Where would this item be reported on Venture's financial statements?

Stockholders' equity is composed of three parts: contributed capital, earnings retained in the business, and dividends paid.