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Exam 11: Reporting and Analyzing Stockholders Equity

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Question 21

Multiple Choice

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What is the total stockholders' equity based on the following account balances?

A) $1,400,000.
B) $1,820,000.
C) $1,760,000.
D) $1,700,000.

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

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Question 22

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A stock dividend does not affect the total amount of stockholders' equity.

A) True
B) False

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Question 23

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Racer Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, Racer's total stockholders' equity was

Two classifications appearing in the paid-in capital section of the balance sheet are

Hutchinson Company had retained earnings of $15,000 on the balance sheet but disclosed in the footnotes that $2,000 of retained earnings was restricted for plant expansion and $1,000 was restricted for bond repayments. Cash of $2,000 had been set aside for the plant expansion. How much of retained earnings is available for dividends?

The two ways that a corporation can be classified by purpose are

A disadvantage of the corporate form of organization is

The board of directors of Yancey Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2014. The dividend is to be paid on August 15, 2014, to stockholders of record on July 31, 2014. The correct entry to be recorded on July 15, 2014, will include a

Which of the following phrases is not descriptive of the corporate form of business?

Treasury stock should not be classified as a current asset.

Which of the following show the proper effect of a stock split and a stock dividend?

Racer Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, Racer declared and paid a $100,000 cash dividend on December 15, 2014. If the company's dividends in arrears prior to that date were $24,000, Racer's common stockholders received

Nance Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, Nance declared and paid a $75,000 cash dividend on December 15, 2014. If the company's dividends in arrears prior to that date were $18,000, Nance's common stockholders received

A corporation has the following account balances: Common Stock, $1 par value, $80,000; Paid-in Capital in Excess of Par Value, $2,700,000. Based on this information, the

Dividends may be declared and paid in cash or stock.

The net effects on the corporation of the declaration and payment of a cash dividend are to

The amount of stock that may be issued according to the corporation's charter is referred to as the

The stockholders' equity section of Patrick Corporation's balance sheet at December 31 is presented here: Instructions From a review of the stockholders' equity section, answer the following questions. (a) How many shares of common stock are outstanding? (b) Assuming there is a stated value, what is the stated value of the common stock? (c) What is the par value of the preferred stock? (d) If the annual dividend on preferred stock is $30,000, what is the dividend rate on preferred stock? (e) If dividends of $60,000 were in arrears on preferred stock, what would be the balance reported for retained earnings?

CAB Inc. has 1,000 shares of 6%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2014. What is the annual dividend on the preferred stock?

Dividends in arrears are dividends on