Financial Accounting Unit 6

Dividends in a corporation play a similar role to _____________in the partnership and proprietorship structures.

owner withdrawals

Consider the following scenario: Company XYZ has issued 120,000 shares of common stock, 10,000 of which are treasury stock. The company has also issued 5,000 shares of 6%, $50 par, preferred stock. If the company has declared $75,000 in dividends, how much will preferred stockholders receive?

$15,000

Company XYZ has issued 120,000 shares of common stock, 10,000 of which are treasury stock. You own 5,000 shares of stock in XYZ and total stockholder's equity is $350,000. How much equity do you have in the company? (Round all intermediate calculations three decimal places)

$15,750

Company XYZ has issued 120,000 shares of common stock, 10,000 of which are treasury stock. If you own 5,000 shares of stock in XYZ, what is your percentage of ownership in the company's capital?

4 ½ %

Which of the following statements most accurately describes cumulative stock?

A form of preferred stock in which the fixed dividend obligation accumulates, if not paid.

Which of the following statements most accurately describes non-cumulative stock?

A form of preferred stock in which the fixed dividend obligation does not accumulate, or accrue, if not paid.

Stock splits will not:

Affect total stockholder's equity.

All of the following accurately describe common stock except:

Carries a fixed dividend rate.

All of the following accurately describe preferred stock except:

Carries voting rights.

All of the following accurately discuss how cash dividends are determined except:

Common stockholder dividends are paid based on a fixed dividend rate.

Which of the following is not a part of the dividends process?

Dividends are determined based on total stockholder's equity.

Which of the following statements about cash dividends is inaccurate?

Dividends are paid from contributed capital/stock accounts.

Consider the following scenario: Company XYZ has issued 120,000 shares of common stock, 10,000 of which are treasury stock. The company has also issued 5,000 shares of 6%, $50 par, preferred stock. If the company has declared $75,000 in dividends, how much in dividends per share will common stockholders receive? (Round answer two decimal places)

Each stockholder will receive $0.54 in dividends for each share held.

Which of the following statements about outstanding stock is not true?

Includes treasury stock.

Which of the following statements about par value is true?

Is a nominal, arbitrary amount applied to shares of stock; unrelated to actual stock value or price.

All of the following accurately describe the common stock account except...

Is the source for distribution and payment of dividends.

How are stock splits recorded?

No entry is required for a stock split.

Where are dividends reported?

On the statement of retained earnings.

The characteristics of a corporate structure would not include:

Owners are liable for business debt obligations.

When recording for issuance of stock, all of the following accurately describe this process except:

Premium on stock issuance is recognized as income/profit.

Which of the following does not accurately describe Total Stockholder's Equity?

Represents how much capital has been generated through issuance of stock.

All of the following accurately describe retained earnings except...

The portion of equity that is generated through issuing stock.

Which of the following statements accurately describes the affect of treasury stock on total stockholder's equity?

Treasury stock decreases total stockholder's equity.

Which of the following statements about treasury stock is not accurate?

Treasury stock represents ownership in corporate capital.

Which of the following statements about stock dividends is inaccurate?

Will result in an overall decrease in stockholder's equity.