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132. A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of
$120. If the corporation issues a 5-for-1 stock split, the par value of the stock after the split will be:
133. A corporation has 60,000 shares of $25 par value stock outstanding that has a current market value of
$120. If the corporation issues a 5-for-1 stock split, the number of shares outstanding will be:
D. 30,000
134. Earnings per share
135. Samuels, Inc. reported net income for 2011 is $105,000. During 2011 the company had 5,000 shares of
$100 par, 5% preferred stock and 20,000 of $5 par common stock outstanding. Samuels’ earnings per share for
2011 is
136. 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:
Year 1:
$10,000
Year 2:
45,000
Year 3:
90,000
Determine the dividends per share for preferred and common stock for the first year.
137. 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:
Year 1:
$10,000
Year 2:
45,000
Year 3:
90,000
Determine the dividends per share for preferred and common stock for the second year.
138. 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:
Year 1:
$10,000
Year 2:
45,000
Year 3:
90,000
Determine the dividends per share for preferred and common stock for the third year.
139. 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:
Year 1:
$10,000
Year 2:
45,000
Year 3:
90,000
Determine the dividends in arrears for preferred stock for the second year.
140. Match the following stockholders equity concepts to the appropriate answer.
1. a company whose shares can be bought and sold on
publicly held
3. creditors cannot pursue stockholder’s personal
4. a legal entity, separate from the people who create
privately held
5. rules and procedures for corporate conduct of its
articles of
7. company whose shares are not bought or sold on a
141. Match the following stockholders equity concepts to the most appropriate answer.
1. the maximum number of shares a company can
additional paid in
2. account used when issue price exceeds par value of
3. the number of sharing originally sold to
4. a class of stock that provides voting rights for
5. the number of shares currently held by stockholders
authorized shares
1
6. a class of stock that does not provide voting rights
7. a value that the stock is worth on the stock
142. Match the following stockholder’s equity concepts to the best answer.
1. the date that a share of stock must be owned to
stock dividends
2. distribution of a company’s earnings to
3. when dividends are actually distributed to
4. equity account reflecting shares “owed” to
additional paid in
7. Shares of common stock re-acquired by a
8. account used when shares are issued for an amount
143. Match the value to the appropriate account. For the year ended 2012 ABC had the following transactions:
- issued 10,000 shares of $2.00 par value common stock for $12.00 per share
- issued 3,000 shares of $50 par value 6% preferred stock for $70 per share
- purchased 1000 shares of previously issued common stock for $15.00 per share
-reported net income of $200,000
- declared and paid a total dividend of $40,000
Assume that retained earnings had a beginning balance of $75,000.
144. A company had stock outstanding as follows during each of its first three years of operations: 2,500 shares
of $10, $100 par, cumulative preferred stock and 50,000 shares of $10 par common stock. The amounts
distributed as dividends are presented below. Determine the total and per share dividends for each class of
stock for each year by completing the schedule.
Preferred
Common
Year
Dividends
Total
Per Share
Total
Per Share
1
$10,000
_________
_________
_________
_________
2
25,000
_________
_________
_________
_________
3
60,000
_________
_________
_________
_________
145. On April 1, 10,000 shares of $5 par common stock were issued at $22, and on April 7, 5,000 shares of $50
par preferred stock were issued at $104. Journalize the entries for April 1 and 7.
146. 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.
Journalize the entries for May 10 and 15, assuming that the common stock is to be credited with the stated
value.
147. On February 1 of the current year, Motor, Inc. issued 700 shares of $2 par common stock to an attorney in
return for preparing and filing the Articles of Incorporation. The value of the services is $9,600. Journalize
this transaction.
148. 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.
149. Sabas Company has 20,000 shares of $100 par, 1% non-cumulative preferred stock and 100,000 shares of
$50 par common stock. The following amounts were distributed as dividends:
Year 1:
$10,000
Year 2:
15,000
Year 3:
90,000
Determine the dividends per share for preferred and common stock for each year.
150. 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:
Year 1:
$10,000
Year 2:
45,000
Year 3:
90,000
Determine the dividends per share for preferred and common stock for each year.
151. Sabas Company has 40,000 shares of $100 par, 1% preferred stock and 100,000 shares of $50 par common
stock. The following amounts were distributed as dividends:
Year 1:
$ 50,000
Year 2:
90,000
Year 3:
130,000
Determine the dividends per share for preferred and common stock for each year.
152. 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)
Journalize the entry to record the stock split.
153. On May 1, 10,000 shares of $10 par common stock were issued at $30, and on May 7, 5,000 shares of $50
par preferred stock were issued at $111. Journalize the entries for May 1 and May 7.
154. The dates of importance in connection with a cash dividend of $50,000 on a corporation’s common stock
are January 15, February 15, and March 15. Journalize the entries required on each date.
155. Vincent Corporation has 100,000 share 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.
156. On April 2nd a corporation purchased for cash 5,000 shares of its own $10 par common stock at $16 a
share. They sold 3,000 of the treasury shares at $19 a share on June 15th. The remaining 2,000 shares were
sold on November 10th for $12 a share.
(a)
Journalize the entries to record the purchase (treasury stock is recorded at cost).
(b)
Journalize the entries to record the sale of the stock.
157. On June 5, Belen Corporation reacquired 3,300 shares of its common stock at $45 per share. On July 15,
Belen sold 2,000 of the reacquired shares at $48 per share. On August 30, Belen sold the remaining shares at
$42 per share.
Journalize the transactions of June 5, July 15, and August 30.
158. Using the following accounts and balances, prepare the Stockholders’ Equity section of the balance
sheet. Fifty thousand shares of common stock are authorized, and 5,000 shares have been reacquired.
Common Stock, $50 parommon Stock, $50 par
$1,250,000
Paid-In Capital in Excess of Par
800,000
Paid in Capital from Sale of Treasury Stock
42,000
Retained Earnings
4,350,000
Treasury Stockeasury Stock
155,000
159. Morocco Inc. reported the following results for the year ending April 30, 2014:
Retained earnings, May 1, 2013
$3,750,000
Net income
680,000
Cash dividends declared
80,000
Stock dividends declared
220,000
160. Indicate whether the following actions would (+) increase, (-) decrease, or (0) not affect a company's total
assets, liabilities, and stockholders' equity.
Stockholders'
Assets
Liabilities
Equity
(1)
Declaring a cash dividend
_______
_______
_______
(2)
Paying the cash dividend declared in (1)
_______
_______
_______
(3)
Declaring a stock dividend
_______
_______
_______
(4)
Issuing stock certificates for the stock
dividend declared in (3)
_______
_______
_______
161. 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:
Year 1
$30,000
Year 2
6,000
Year 3
80,000
Required:
Determine the dividends per share for preferred and common stock for each year.
162. Future Sources, Inc. reported the following results for the year ending July 31, 2012:
Retained earnings, August 1, 2011
$875,000
Net income
260,000
Cash dividends declared
120,000
Stock dividends declared
100,000
Prepare a retained earnings statement for the fiscal year ended July 31, 2012.
163. Using the following information, prepare the Stockholders’ Equity section of the balance sheet. Seventy
thousand shares of common stock are authorized and 7,000 shares have been reacquired.
Common Stock, $75 par
$4,725,000
Paid-in Capital in Excess of Par
679,000
Paid-in Capital from Sale of Treasury Stock
25,200
Retained Earnings
2,032,800
Treasury Stock
600,000
164. The following account balances appear on the balance sheet of Osgood Industries:
Common Stock (300,000 shares authorized, $100 par): $10,000,000
Paid-in Capital in Excess of Par – Common Stock: $2,000,000;
Retained earnings: $45,000,000.
The board of directors declared a 2% stock dividend when the market price of the stock was $135 a
share. Osgood reported no income or loss for the current year.
Required:
(1)
Journalize the entries to record
a.
the declaration of the
dividend, capitalizing an
amount equal to market
value; and
b.
the issuance of the stock
certificates.
(2)
Determine the following amounts before the stock dividend was declared:
a.
Total paid-in capital;
b.
Total retained earnings;
and
c.
Total stockholders’ equity.
(3)
Determine the following amounts after the stock dividend was declared and closing
entries were recorded at the end of the year:
a.
Total paid-in capital;
b.
Total retained earnings;
and
c.
Total stockholders’ equity.
165. On March 4, of the current year, Barefoot Bay, Inc. reacquired 5,000 shares of its common stock at $89
per share. On August 7, Barefoot Bay sold 3,500 of the reacquired shares at $100 per share. The remaining
1,500 shares were sold at $88 per share on November 29.
Required:
(1)
Journalize the transaction of March 4, August 7, and November 29.
(2)
What is the balance in Paid-in Capital from Sale of Treasury Stock on December 31, of the current year?
(3)
Why might Barefoot Bay Inc. have purchased the treasury stock?
166. Marcos Company, which had 35,000 shares of common stock outstanding, declared a 4-for-1 stock split.
Required:
(1)
What will be the number of shares outstanding after the split?
(2)
If the common stock had a market price of $280 per share before the stock split, what would be an approximate
market price per share after the split?
167. Selected transactions completed by Breezeway Construction during the current fiscal year are as follows:
February 3
Split the common stock 2 for 1 and reduced the par from $40 to $20 per share. After the split there
were 250,000 common shares outstanding.
April 10
Declared semiannual dividends of $1.50 on 18,000 shares of preferred stock and $0.08 on the common
stock to stockholders of record on May 10, payable on June 9.
June 9
Paid the cash dividends.
October 10
Declared semiannual dividends of $1.50 on the preferred stock and $0.04 on the common stock (before
the stock dividend). In addition, a 2% common stock dividend was declared on the common stock
outstanding. The fair market value of the common stock is estimated at $36.
December 9
Paid the cash dividends and issued the certificates for the common stock dividend.
Required: Journalize the transactions.
