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Exam 10: Stockholders Equity

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Question 71

Multiple Choice

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Outstanding common stock refers to the total number of shares:

A) Issued.
B) Issued plus treasury stock.
C) Issued less treasury stock.
D) Authorized.

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

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Question 72

Multiple Choice

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The corporation's own stock that has been issued and then repurchased by the company is referred to as:

A) Preferred Stock.
B) Authorized Stock.
C) Treasury Stock.
D) Common Stock.

E) A) and C)
F) All of the above

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Question 73

True/False

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A company credits Additional Paid-in Capital for the portion of the cash proceeds above par value received for the issuance of stock.

Stock repurchases reduce the number of shares outstanding, thereby increasing earnings per share.

The board of directors of Capstone Inc. declared a $0.60 per share cash dividend on its $1 par common stock. On the date of declaration, there were 50,000 shares authorized, 20,000 shares issued, and 5,000 shares held as treasury stock. What is the entry for the dividend declaration?

California Adventures issues 5,000 shares of 8%, $100 par value preferred stock at the beginning of 2011. All remaining shares are common stock. The company was not able to pay dividends in 2011, but plans to pay dividends of $100,000 in 2012. Assuming the preferred stock is noncumulative, how much of the $100,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders in 2012?

Par value has a direct relationship to the market value of the common stock. Par value is the legal capital per share of stock that's assigned when the corporation is first established. Par value has no relationship to the market value of the common stock.

The balance of Retained Earning at the end of the year represents:

When treasury stock is resold at a gain, the difference between its cost and the cash received when resold:

Donnie Hilfiger has the following balances in its stockholders' equity accounts on December 31, 2012: Treasury Stock, $375,000; Common Stock, $350,000; Preferred Stock, $1,200,000; Retained Earnings, $1,675,000; and Additional Paid-in Capital, $3,150,000. Prepare the stockholders' equity section of the balance sheet for Donnie Hilfiger as of December 31, 2012.

Retained Earnings represent a company's:

Match the following terms with their definitions. Each letter is used only once.

The PE ratio:

Common stockholders usually have all of the following rights except:

On November 6, Coleman Corp. reacquired 1,000 shares of its $2 par value common stock for $27 each. On November 20, Coleman Corp. reissued 400 shares for $30 each. Which of the following is correct regarding the effect of the journal entry for the reissued shares?

Explain the difference between authorized, issued, and outstanding shares.

Hayes Corporation issues 100 shares of its $1 par value common stock for $15 per share. The entry to record the issuance will not include a:

The par value of shares issued is normally recorded in the:

A corporation has lower taxes and less paperwork relative to sole-proprietorships and partnerships. A corporation has higher taxes and more paperwork relative to sole-proprietorships and partnerships.

If a company issues 1,000 shares of $1 par value common stock for $30 per share, what would be the effect on the accounting equation?