ACCT: STOCKHOLDERS EQUITY
Prior to $4000 stock dividend, total stockholders equity equals $50,000. After the stock dividends, total stockholders equity equals______.
$50,000
And accumulated deficit means a company has ____.
Accumulated more net loss than net income
Items such as unrealized gains and losses from pension, foreign currencies our financial investments are reported as _____.
Accumulative other comprehensive Income
Stock split
An increase in the total number of authorize shares by a specific ratio; does not affect retained earnings
Par value
An insignificant value per share of capital stock specified in the charter.
An increase in the Rich's Farm's Account called Barry Rich, capital would occur when ___.
Barry Rich invest cash in Rich's farm
No-Par Value Stock
Capital stock that has no power value specified in the corporate charter
The entry to record the issuance of 100 shares of 3%, $100 part value preferred stock at a price of $105 is recorded with a debit to_____.
Cash of $10,500 in credit to preferred stock of $10,000 and additional paid-in capital-preferred of $500
Which of the following organization is required by law to apply for a charter?
Corporation
The Dewey, Cheatum, and Howie Partnership paid each of the partners $100,000 for the work they perform during the year. As a result these payments, the closing process will include a ______.
Credit to each partner's drawing account
Did you want Andrew to record the closing of drawing requires a _____ (debit/ credit) to the capital account and a_______ (debit/credit) to the drawings account.
Debit credit
Mr. Bigg received a $5000 payment from his sole proprietorship , Buy and Large, for work performed by Mr. big. The payment should be recorded with a $5000_____.
Debit to M. Big, drawings
Did general Andrew to record the payment of a previous declare dividend includes a ______.
Debit to cash credit to dividends payable
The closing entry of a sole proprietorship requires the revenues to be ______ (debited/credited) and the Capital account to be ______ (debited/credited)
Debited credited
Similar to a stock split, a stock_________also distribute additional shares of stock stew existing stockholders on a pro rata basis at no cost to the stockholders.
Dividend
Dividends in Arrears
Dividends on cumulative preferred stock have not been declared in prior years.
Which of the following is true?
Do you drawings account is a sole proprietorship account and has a normal balance of a debt.
Match each form of organization with its advantages
Partnership: ease of formation no separate business income taxes complete control by owners Corporation: Limited liability Availability of capital
Wok N Roll, Inc.. Began on January 1 by issuing 100,000 shares of $1 par value common stock and 1000 shares of $100 per value, 5% cumulative preferred stock. No dividends were declared for two years. In the third year Wok N Roll Declared and paid a point $.50 dividend declared and paid in the third year equals _____.
$65,000
During the year, Squid Roe's INC. revenues were $200,000 and it's net income was $60,000. It had not preferred shares and it's stockholders equity and total assets were $380,000 and $780,000 at the beginning of the year and $420,000 and $900,000 at year-end, respectively. ROE (rounded to the nearest tenth of a percent) equals ______.
15.0%
An LLC Is different from a corporation in that LLC has_____.
A distribution of net income section in it's financial statement
Stock dividend
A dividend that distributes additional shares of a corporations on stock
Why is additional paid in capital recorded for a small stock dividend?
Because small stock dividends are recorded at market value
The general entry to record large stock dividends includes a debit to retain earnings and a credit to_____.
Common stock
Before dividends can be paid to come in stockholders, the ________ preferred stockholders must be paid______.
Cumulative; dividends in arrears
To raise long amount of long-term financing a company issued Bonds. This form of financing is referred to as____________.
Debt financing
Match the date with the related event.
Declaration date = the board of directors officially approves a dividend Date of record = stock records are finalized to determine with stockholders are to recieve payment Payment date = dividends payable is decreased
Preferred stock generally____________preference as to dividends.
Has
The owner of the sole proprietorship pays personal income taxes_____.
Only on the owners individual income tax return
_________ shares equal the number of shares_____ minus the number of shares we purchased by the company.
Outstanding Issued
Large stock dividends are recorded at _______ and small stock dividends are recorded at______.
Par value; market value
An organization that must have two or more co-owner just called a(n) _______.
Partnership
Declaration Date
The date of which the board of directors officially approves a dividend.
Payment date
The date on which a cash dividend paid to the stockholders of record.
Record date
The date on which the corporation prepares a list of current stockholders as shown on its records; dividends can be paid only to the stockholders who owns stock on that date.
Current Divided Preference
The future of preferred stock that grants priority on preferred dividends overcome and dividends.
Authorized shares
The maximum number of shares of capital stock of corporation that can be issued, as specifics in the charter.
Cumulative Divided Preference
The preferred stock feature that requires current dividends not paid in full to accumulate for every year in which they are not paid. These cumulative unpaid amounts (called dividends in arrears) must be paid before any come in dividends can be paid.
Season new issues are_____.
The selling of additional new shares
Before the board of directors to Claire's a customer in it should you consider whether _____.
There is sufficient cash There are sufficient retain earnings
Why am I a company issued a stock dividend?
• to signal an exception of significant future earnings •To demonstrate commitment to stockholders rock conserving cash during difficult times •To lower the market price per share
X-co issued 1000 shares of its 5%, $100 par value, cumulative preferred stock for $100 cash per share. The general entry to record this event includes a_________.
•$100,000 debit to cash •$100,000 credit to preferred stock
What are the benefits of common stock?
•A PREEMPTIVE RIGHTS to buy newly-issued stock before is it offered to others •VOTING RIGHTS •A RESIDUAL CLAIM on assists after creditors and preferred stockholders have been satisfied •the right to receive DIVIDENDS if they are declared
Defective large large duck dividend on the accounting equation includes______.
•A decrease in retained earnings •An increase in common stock •No affect on total stockholders equity
With drawls by a partner cause _______.
•Assets to decrease •Owners equity to decrease
It's over proprietorship has two owners equity account. The ______ reports the amount invested by the owner and the ______ account reports the amount of with drawls.
•Capital •Drawing
Did you know entry to record the cash investment by a partner named B. Rich includes a ______.
•Credit to B. Rich, capital •Debit to cash
Barry Rich, The owner of riches farm, with through $5000 from the sole proprietorship. They effect of this transaction on the Rich's farm includes $5000
•Decrease in owners equity •Decrease in assets
A cash dividends differs from a 2-for-1 stock split in that a cash dividend _______.
•Decreases retain earnings •Decrease his current assets
The risk from financial leverage ______.
•Increases when the cost of borrowing is greater than the return •Decreases when a company issues new shares of stock
Which of the following line items amounts would be under it the retained earnings column of a statement of stockholders equity?
•Net income •dividends: common •dividends: preferred
Which of the following line items are found on the statement partners equity
•Net income for the year •Drawings during the year •additional contributions during the year
Identify what is needed to calculate the P/E ratio.
•Stock price •Earnings per share
Atomic, INC. Had 100,000 shares authorize, and 10,000 shares issued and on outstanding of it's $2 par value come in stock. Our December 31, common stock equals $20,000 and total stockholders equity equal to $100,000 prior to a 2-for-1 stock split. As a result of a 2-for-1 stock split, ________.
•The number of shares outstanding equal to 20,000 •Par value equals $1 • stockholders equity equals $100,000 •The common stock equals $20,000
Which of the following statements are true?
•two sources of financing for a corporation are debit and equity •an advantage of equity over debt financing is corporations are not required to pay dividends or repay stockholders
Locks, stocking bagel, INC. Issued 5000 shares of 100,000 authorize. It is since repurchased 5000 of each shares. The number of shares outstanding equals ________ shares.
45,000
I to raise large amounts of long-term financing, a company issued additional series of common stock. This one of the financing is referred to as_____.
Equity financing
The state of record is the date on which the corporation _______.
Finalizes its list of stockholders who will receive dividends
The reacquisition of preferred stock is referred to as a redemption because stocks stocks are ____.
Formally retired
Which type of investment will pay the most dividend?
Income investment
When is shareholder of limited ink cells it shows to another investor on the stock exchange Leamington is accounting equation________.
Is not affected because the corporation is separate from its owners
Treasury stock
Issued shares that have been reacquired by the company
If Squid Roe Inc's P/E ratio is 12 and Lox, Stock and Bagels is 20, then investors expect _____.
Lox, Stock and Bagels earrings to gross at a faster rate than Squid Roe's
Earnings per share (EPS) equals _______ divided by the average shares of common stock outstanding.
Net income
Miss Hap, the bookkeeper for the sole proprietorship Buy & Large, forgot to close the Drawing account T the end of the accounting period. As a result _____.
Net income will be unaffected
And when does a corporation record an increase in dividends payable?
On the declaration date
preferred stockholders_______.
Receives dividends before common stockholders
Corporations will declare stock dividends (or stock split) in order to______.
Reduce the market price of the shares of stock and make it more attractive to some investors
The stock dividend causes a stockholders percentage ownership in a company to_____.
Remain the same
Which of the following line items are not found on the sole proprietorship's statement of owners equity?
Retained earnings
_______ _________ represents the earned capital and _____ capital represents the paid in capital.
Retained earnings contributed
Outstanding shares
Says that are currently held by stockholders (not the corporate itself).
Issued Shares
Shares of stock that have been distributed by the corporation
preferred stock
Start to have specified rights over in stock.
Common stock
The basic voting stock issued by a corporation to stockholders.
Why am I a corporation want to re-purchase it stock from existing stockholders?
To obtain shares to reissue two employees as a part of employee stock purchase plans
The term " capitalizing retain earnings" refers to_____.
Transferring from attain earnings to come in stock the amount of stock dividends
Under the IFRS, If the company issuing preferred stock is contractually obligated to pay dividends or to redeem the share at future date, then preferred stock is classified as ________.
a liability
The purpose of the statement of partners capital is to show each partners _____.
• Share of net income earned during the year •Contributions during the year •Drawings during the year
Which of The following would be found on the statement of stockholders equity?
• stock issuances • treasury stock • dividends •net income • additional paid-in capital