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Exam 12: Corporations: Organization, Stock Transactions, and Dividends

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Question 21

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A company has 10,000 shares of $10 par common stock outstanding. Prepare entries to record the following: (a) Purchased 1,000 shares of treasury stock at $\$ 12$ . The treasury stock is accounted for by the cost method. There were no previous purchases of treasury shares. (b) Sold 500 shares of treasury stock at $\$ 15$ . (c) Purchased equipment for $\$ 75,000$ , paying $\$ 25,000$ in cash and issuing 4,000 shares of common stock for the remaining. (d) Sold 500 shares of treasury stock at $\$ 11$ .

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(a) _TB2281_00 (b) _...

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Question 22

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When common stock is issued in exchange for land, the land should be recorded in the accounts at the par value of the stock issued.

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Question 23

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The main source of paid-in capital is from issuing stock.

On May 10, a company issued for cash 1,500 shares of no-par common stock (with a stated value of $2) at $14, and on May 15, it issued for cash 2,000 shares of $15 par preferred stock at $58. What is the amount of paid-in capital in stated value at May 10 and paid-in capital in excess of par at May 15, assuming that the common stock is to be credited with the stated value?

Treasury Stock is listed in the stockholders' equity section on the balance sheet.

Macy Company has 10,000 shares of 2% cumulative preferred stock of $50 par and 25,000 shares of $75 par common stock. The following amounts were distributed as dividends: ​ $\begin{array} { | l | r | } \hline \text { Year 1: } & \$ 30,000 \\\hline \text { Year 2: } & 6,000 \\\hline \text { Year 3: } & 80,000 \\\hline\end{array}$ ​ Determine the dividends per share for preferred and common stock for each year.

The two main sources of stockholders' equity are investments contributed by stockholders and net income retained in the business.

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends: $\begin{array}{lr}\text { Year 1: } & \$ 10,000 \\\text { Year 2: } & 45,000 \\\text { Year 3: } & 90,000\end{array}$ Determine the dividends in arrears for preferred stock for the second year.

Which of the following is not a characteristic of a corporation?

On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with a current market price of $73. Journalize this transaction.

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends: $\begin{array}{lr}\text { Year 1: } & \$ 10,000 \\\text { Year 2: } & 45,000 \\\text { Year 3: } & 90,000\end{array}$ Determine the dividends per share for preferred and common stock for the third year.

On January 1, Vermont Corporation had 40,000 shares of $10 par value common stock issued and outstanding. All 40,000 shares had been issued in a prior period at $20.00 per share. On February 1, Vermont purchased 3,750 shares of treasury stock for $24 per share and later sold the treasury shares for $21 per share on March 1. The journal entry to record the purchase of the treasury shares on February 1 would include a

A large public corporation normally uses registrars and transfer agents to maintain records of the stockholders.

The date on which a cash dividend becomes a binding legal obligation is on the

When Wisconsin Corporation was formed on January 1, the corporate charter provided for 100,000 shares of $10 par value common stock. The following transaction was among those engaged in by the corporation during its first month of operation: The corporation issued 8,500 shares of stock at a price of $16 per share. The entry to record the above transaction would include a

The cost of treasury stock is deducted from total paid-in capital and retained earnings in determining total stockholders' equity.

A corporation, which had 18,000 shares of common stock outstanding, declared a 3-for-1 stock split. (a) What will be the number of shares outstanding after the split? (b) If the common stock had a market price of $\$ 240$ per share before the stock split, what would be an approximate market price per share after the split? (c) Joumalize the entry to record the stock split.

Vincent Corporation has 100,000 shares of $100 par common stock outstanding. On June 30, Vincent Corporation declared a 5% stock dividend to be issued on July 30 to stockholders of record July 15. The market price of the stock was $132 a share on June 30. Journalize the entries required on June 30, July 15, and July 30.

The authorized stock of a corporation

A company has 10,000 shares of $10 par common stock outstanding. Prepare entries to record the following: (a) Purchased 1,500 shares of treasury stock at $\$ 16$ . The treasury stock is accounted for by the cost method. There were no previous purchases of treasury shares. (b) Sold 1,000 shares of treasury stock at $\$ 19$ . (c) Purchased equipment for $\$ 80,000$ , paying $\$ 25,000$ in cash and issuing 4,000 shares of common stock for the remaining. (d) Sold 500 shares of treasury stock at $\$ 14$ .