Chapter 13 review
A corporation declares a dividend of $0.50 per share on 18,000 shares of common stock. Which of the following is included in the entry to record the declaration?
Cash Dividends is debited for $9,000.
Which of the following is included in the entry to record the issuance of 14,000 shares of $7 par value common stock at $21 per share for cash?
Cash is debited for $294,000.
Bentley Corporation received cash from issuing 17,000 shares of common stock at par on January 1, 2018. The stock has a par value of $0.05 per share. Which is the correct journal entry to record this transaction?
Cash is debited for $850, and Common stock -- $0.05 Par Value is credited for $850.
On November 1, 2018, Nada, Inc. declared a dividend of $5.00 per share on common stock. Nada, Inc. has 20,000 shares of common stock outstanding and no preferred stock. The date of record is November 15, and the payment date is November 30, 2018. Which of the following is the journal entry needed on November 30, 2018?
Debit Dividends Payable--Common $100,000, and credit Cash $100,000.
Treasury stock _
decreases the number of shares outstanding
On the date of record for a dividend, the company
determines who owns the shares of stock on that date
Midtown, Inc. had the following transactions in 2018, its first year of operations: bullet Issued 31,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $20.00 per share. bullet Earned net income of $70,000. bullet Paid no dividends.
$690,000
Belton, Inc. had the following transactions in 2018, its first year of operations: bullet Issued 33,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $24.00 per share. bullet Earned net income of $73,000. bullet Paid no dividends.
$792,000
On November 1, 2018, Uno, Inc. declared a dividend of $4.50 per share. Uno, Inc. has 23,000 shares of common stock outstanding and no preferred stock. Which of the following is the journal entry needed to record the declaration of the dividend?
Debit Cash Dividends $103,500, and credit Dividends Payable--Common $103,500.
Which of the following corporate characteristics is a disadvantage of a corporation?
Earnings of a corporation may be subject to double taxation.
Lack of mutual agency is best described as which of the following?
Stockholders are not authorized to sign contracts or make business commitments on behalf of the corporation.
Which of the following is true of a corporation?
The earnings of a corporation may be subject to double taxation.
A corporation originally issued $13 par value common stock for $15 per share. Which of the following is included in the entry to record the purchase of 300 shares of treasury stock for $11 per share?
Treasury Stock--Common is debited for $3,300.
Which of the following is not included in income from continuing operations?
a segment of a business that has been discontinued
Paid-in capital consists of ________.
amounts received from stockholders in exchange for stock
Outstanding stock represents shares of stock that
are held by the stockholders
Prior period adjustments
are shown on the statement of retained earnings as corrections to the beginning balance
On the ________, cash dividends become a liability of a corporation.
declaration date
The purchase of treasury stock
decreases assets and stockholders' equity
If treasury shares are sold for less than their cost, the difference is recorded as a loss.
false
If treasury stock is resold for more than cost, the difference is debited to the account Paid-In Capital from Treasury Stock Transactions.
false
Treasury stock has voting rights and receives cash or stock dividends.
false
The retained earnings of a corporation is
internally generated equity that is earned by profitable operations that is not distributed to stockholders
When a previously declared dividend is paid, which of the following occurs?
liabilities decrease
Which of the following is an advantage of the corporate form of business?
limited liability of stockholders
The two basic sources of stockholders' equity are
paid-in capital and retained earnings
Preferred stockholders
receive a dividend preference over common stockholders
Which of the following best describes the appropriation of retained earnings?
restricting part of retained earnings for expansion or contingencies
The par value of stock is
the amount assigned by a company to a share of its stock
Which of the following is a reason for a company to announce a stock split?
to decrease the market price at which the stock is trading
A corporation is a separate legal entity that is organized independently of its owners.
true
Earnings per share for income from continuing operations must be reported on the face of the income statement.
true
Stockholders of a corporation are not personally liable for the corporation's debt.
true
Treasury stock is a contra equity account.
true
Restrictions on retained earnings are
usually reported in the notes to the financial statements
Which of the following occurs when a cash dividend is declared?
stockholders' equity decreases
Assume the following information for Western Sales, Inc.: bullet Common Stock, $1.00 par, 232,000 shares issued, 185,000 shares outstanding bullet Paid-In Capital in Excess of Parlong dashCommon: $1,690,000 bullet Retained Earnings: $2,460,000 bullet Treasury Stock: 47,000 shares purchased at $17 per share If Western Sales purchases an additional 8,000 shares of treasury stock at $20 per share, what number of shares will be shown as issued and outstanding?
232,000 issued; 177,000 outstanding
Which of the following is true of dividends?
Dividends are a distribution of cash, stock, or other property to stockholders.
On December 2, 2018, Eshares, Inc. purchases land. In payment for the land, Eshares, Inc. issues 6,000 shares of common stock with $6 par value. The land has been appraised at a market value of $430,000. Which of the following is included in the journal entry to record this transaction?
credit Common Stock- $6 Par Value for $36,000 and credit Paid-In Capital in Excess of Par-Common $394,000
