Ch. 13 Corporations: Organization, Stock Transactions, and Dividends Part 4 Quiz

What is the total stockholders' equity based on the following data? Common Stock $800,000 Excess of Issue Price Over Par 375,000 Retained Earnings (deficit) 25,000

$1,150,000 800,000 + 375,000 - 25,000

The Dayton Corporation began the current year with a retained earnings balance of $25,000. During the year, the company corrected an error made in the prior year, which was a failure to record depreciation expense of $3,000 on equipment. Also, during the current year, the company earned net income of $12,000 and declared cash dividends of $5,000. Compute the year end retained earnings balance.

$29,000 12,000 - 5,000= 7,000 25,000 + 7,000= 32,000 32,000- 3,000= 29,000

What is the total stockholders' equity based on the following data? Common Stock $510,000 Excess of Issue Price Over Par 375,000 Retained Earnings (deficit) 50,000

$835,000 510,000 + 375,000 - 50,000

If paid-in-capital in excess of par/preferred stock is $30,000, preferred stock is $200,000, paid-in-capital in excess of par/common stock is $20,000, common stock is $525,000, and retained earnings is $105,000 (deficit), the total stockholders' equity is $880,000.

False

The term deficit is used to refer to a debit balance in which of the following accounts of a corporation?

Retained Earnings

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

True

The retained earnings statement may be combined with the income statement.

True

Which of the following would result in a credit to retained earnings?

an understatement of a revenue in the prior period

Retained earnings

changes are summarized in the retained earnings statement

Which of the following would appear as a prior-period adjustment?

error in the computation of depreciation expense in the preceding year

A restriction/appropriation of retained earnings

has no effect on total retained earnings

If the board of directors authorizes a $100,000 restriction of retained earnings for a future plant expansion, the effect of this action is to

reduce the amount of retained earnings available for dividend declarations.