Chapter 11 Flashcards
(24 cards)
A corporation can sell shares of ownership called:
stock
Most large, public corporations are incorporated in what state?
Delaware
______________ is stock that a corporation has issued and then reacquired.
Treasury Stock
The maximum number of shares a corporation is legally allowed to sell is the number of:
authorized shares
value, while small stock dividends are valued at ————–
value.
par, market
One famous court case involving the responsibility of corporations to their stockholders was the Dodge Brothers vs. ______________.
Ford Motor Company
The two main categories of stockholders’ equity are:
retained earnings and paid-in capital
Stockholders of a corporation directly elect the:
board of directors
The par value of a share of common stock:
is stated in the charter
If a corporation issues 3,000 shares of $2.40 par value common stock for $36,000, this stock issuance would cause:
Common Stock to increase by $7,200
Secord Corporation purchased 2,800 shares of its own $1.50 par value common stock for $135,000. As a result of this transaction, the company’s stockholders’ equity would:
decrease by $135,000
Grievous Corporation issued 5,000 shares of $1 par value common stock. Later that year, Grievous purchased 2,000 shares of its own common stock. Two months later, the company reissued 300 shares. How many shares are issued and outstanding?
5,000 issued and 3,300 outstanding
A stock split:
has no effect on total stockholders’ equity
When treasury stock is sold for less than its cost, the journal entry should include a debit to:
Additional Paid-in Capital — Treasury Stock
Stockholders are eligible for a dividend if they own the stock on the date of:
record
Kenobi Corporation has 10,000 shares of 4% preferred stock outstanding. Also, there are 100,000 shares of common stock outstanding. The par value of preferred stock is $10/share and the par value of common stock is $1/share. If an $82,500 dividend is paid, how much goes to the preferred stockholders?
$4,000
Kenobi Corporation has 10,000 shares of 4% preferred stock outstanding. Also, there are 100,000 shares of common stock outstanding. The par value of preferred stock is $10/share and the par value of common stock is $1/share. If an $82,500 dividend is paid, what per share dividend do common stockholders receive?
$0.785
J. J. Binks, Inc. declares a 5% stock dividend. The debit to Retained Earnings is an amount equal to the:
market value of the shares to be issued
Erso, Incorporated had 20,000 shares issued and outstanding of its $0.50 par value common stock. At December 31, Common Stock equaled $10,000, Retained Earnings equaled $20,000 and Total stockholders’ equity equaled $50,000 prior to a 2-for-1 stock split. As a result of a 2-for-1 stock split:
par value equals $0.25
Trade Federation, Inc. issues 200,000 shares of stock with a par value of $0.14 for $163 per share. Three years later, it repurchases 100,000 shares for $93 per share. How would Trade Federation record the repurchase?
Debit Treasury Stock for $9.3 million and credit Cash for $9.3 million.
On February 16, Dagobah Company declares a $0.35 dividend to be paid on April 5. Dagobah has 2,010,000 shares of common stock issued and outstanding. The entry recorded by the company on February 16 includes a debit to:
Dividends and a credit to Dividends Payable for $703,500.
Windu corporation had 50,000 shares of $20 par value common stock outstanding. The board of directors declared and issued a 50% stock dividend. The market value of the stock was $27 per share. What is the journal entry to record this stock dividend?
Debit Retained Earnings and credit Common Stock for $500,000.
Andor company has net income of $5.6 million and earnings per share of $2.00. Average common stockholders’ equity is $32 million. The company’s current stock price is $10 per share. What is its Price/Earnings (P/E) ratio?
5.0
Which of the following statements would not explain why a company may want to repurchase its stock?
to increase the number of shares of outstanding stock.
