Accounting Ch. 10
Just In Thyme, In. has the following end of year equity balances: Common stock of $20,000; Additional paid-in capital of $30,000; and Retained earnings of $50,000. If Just In Thyme repurchases $10,000 of its stock, the total stockholders' equity balance would equal
$90,000
On March 1, 2018, Fresh Corp. declared a dividend of $3,000. The record date is March 20, 2018, and the payment date is April 1, 2018. The journal entry required on April 1, 2018, will include which of the following entries?
-Credit cash $3000 -Debit dividends payable $3000
Invested Capital
-Common stock
When a cash dividend is declared and paid in the same year, the total effects on the balance sheet include:
-Decrease stockholders' equity -decrease assets
retained earnings of $100,000 represent a corporation cumulative earnings __________ and is shown on the ____________.
-Kept; balance sheet and statement of retained earnings
a corp may repurchase its shares of stock because management
-belives the market price of the stock is undervalued.
The dividend payment date is when:
-cash is decreased -dividends payable is decreased.
the journal entry to record reissuing treasury stock at a price below the cost of the treasury stock includes:
-debit to Additional Paid-In Capital -Additional Paid-In Capital is debitied, not creditied, bc the price (cash received) was lower than . the cost of the tresure stock. -credit to Treasury stock -debit to Cash
Treasury stock:
-is a contra-equity account -is shares of stock no longer outstanding -has a neagtive equity balance
an accumulated deficit in retained earnings indicates that the company has
-net losses
The date on which a company determines the registered owners of the the stock who will receive a dividend is referred to as the
-record date
earned capital
-retained earnings
Investors earn a return on stock investments by:
-selling the stock for more than its cost. -receiving dividends
3 prime cats of cash flows
1.) cash flows from operating activities 2.) cash flows from investing activities 3.) cash flows from financing activities
On March 1, 2018 Fresh Corp. declared a dividend of $3000. The record date is March 20, 1018, and the payment date is April 1, 2018. What is the journal entry required on March 20, 2018?
No entry is required
When a company repurchases its own securities, the stock is recorded in which account?
Treasury stock
When does a dividend become a liability to a corporation?
When it is declared by the board of directors.
statement of cash flows
a financial statement that measures activities involving cash recipts and cash payments over a period of time.
Similar to a stock split, a stock dividend also distributes
additional shares of stock to existing stockholders on a pro rata basis at no cost to the stockholders.
how is treasury stock reported in the financial statements?
as a contra equity account
Dillution Solutions, Inc. repurchased 1,000 shares of its $1 par value common stock for $5,000. The journal entry to record this tranaction includes a $5,000
debit to Treasury Stock.
Dividends payable is recorded as a credit on the
declaration date
a distribution of assets to shareholders is reffered to as an
dividend
Payment Date
dividends payable is decreased
A corporation_______have a legal obligation to pay dividends.
does not
debit balance
in the retained earnings represents an accumulated deficit.
Operating activities
include cash receipts and cash payments for transactions relating to revenue and expense activites.
Investing Activities
include cash transactions involving the purchasing and sale of long-term assets and current investments.
Financing Activities
includes cash transactions of the external financing of a business.
a common reason for companies repurchasing their own shares is that they
may want to redistribute corporate cash without paying dividends.
only_______common shares are eligable to receive dividends.
outstanding
Date of Record
stock records are finalized to determine which stockholders are to receive payment
declaration date
the board of directors officially approves a dividend
the contra account used to record a company's repurchase of its own common stock is the
treasury stock account
Which of the following occurs on the date of record?
-A list of shareholders that are entitled to receive a dividend is made.
The date on which a company determines the registered owners of the stock who will receive a dividend is reffered to as the
record date
Refurbish Inc bought 1,000 shares of its own stock for $8,000. Later it resold the shares for $10,000. The Journal entry to record the sale of treasury stock includes an
-$2,000 credit to Additional paid-in capital -$8,000 credit to Treasury stock
Refurbish Inc reissued 1,000 shares of its treasury stock for $10,000. Prior to the reissuance, the Treasury stock balance was $12,000, which included the $8,000 cost of the 1,000 shares reissued. After recording this transaction,
-Additional paid-in capital will be increased by $2,000 -Treasury stock will equal $4,000
the declaration of cash dividends reduces
retained earnings
on march 1 2018 fresh corp declared a dividend of $3,000. The record date is March 20, 2018, and the payment date is April 1, 2018. The journal entry required on March 1, 2018, will include which of the following entries?
-Credit dividends payable $3000 -Debit dividends $3000
