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Exam 10: Stockholders Equity

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Question 71

Multiple Choice

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The statement of stockholders' equity shows:

A) Only the ending balance in each stockholders' equity account.
B) How each equity account changed over time.
C) Only the beginning balance in each stockholders' equity account.
D) Less information than the stockholders' equity section in the balance sheet.

E) C) and D)
F) B) and D)

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Question 72

Multiple Choice

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Clothing Emporium was organized on January 1,2015.The firm was authorized to issue 100,000 shares of $5 par value common stock.During 2015,Clothing Emporium had the following transactions relating to shareholders' equity: Issued 30,000 shares of common stock at $7 per share. Issued 20,000 shares of common stock at $8 per share. Reported a net income of $100,000. Paid dividends of $50,000. What is total paid-in capital at the end of 2015?

A) $420,000.
B) $370,000.
C) $470,000.
D) $320,000.

E) All of the above
F) C) and D)

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Question 73

Multiple Choice

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Which of the following stages of equity financing comes last in the traditional order of progression?

Jade Jewelers issued 15,000 shares of $1 par value stock for $20 per share.What is true about the journal entry to record the issuance?

All publicly held corporations in the United States are regulated by the Securities and Exchange Commission.

We usually record preferred stock as equity and report it in the stockholders' equity section of the balance sheet just above common stock.

Oregon Outfitters issues 1,000 shares of $1 par value common stock at $20 per share.Later in the year,the company decides to repurchase 200 shares at a cost of $22 per share.(1)Record the original issue of the 1,000 shares, (2)Record the repurchase of 200 shares,and (3)record the entry if Oregon Outfitters reissues the 200 shares of treasury stock at $25 per share.

Corporations typically do not start raising capital by issuing stock to the general public.What are the common stages of equity financing leading to an initial public offering (IPO)?

Clothing Emporium was organized on January 1,2015.The firm was authorized to issue 100,000 shares of $5 par value common stock.During 2015,Clothing Emporium had the following transactions relating to shareholders' equity: Issued 30,000 shares of common stock at $7 per share. Issued 20,000 shares of common stock at $8 per share. Reported a net income of $100,000. Paid dividends of $50,000. What is the total amount recorded in the Common Stock account at the end of 2015?

Prom Night Formal Wear has the following stockholders' equity accounts at December 31,2015: Common Stock,$1 par value,2,000,000 shares;Additional Paid-in Capital,$22 million;Retained Earnings,$15 million;and Treasury Stock,50,000 shares,$1.25 million.Prepare the stockholders' equity section of the balance sheet.

Advantages of the corporate form of business include which of the following?

Financial information for Accessories Unlimited includes the following selected data: What is the company's return on the market value of equity?

On May 15,Canadian Falcon declares a quarterly cash dividend of $0.15 per share payable on June 10 to all stockholders of record on May 31.Record Canadian Falcon's declaration and payment of cash dividends for its 200,000 shares of common stock.

The stockholders' equity section of the balance sheet shows how each equity account changed during the year.

On December 2,Coley Corp.reacquired 1,000 shares of its $2 par value common stock for $27 each.On December 20,Coley Corp.reissued 400 shares for $15 each.Which of the following is correct regarding the journal entry for the reissued shares?

Retained Earnings represent a company's:

Which of the following is TRUE regarding the accounting for treasury stock?

Crossroads Mall had 100,000 outstanding shares of common stock.On June 16,2015,Crossroads repurchased 20,000 shares of its own stock at $30 per share.On July 23,2015,Crossroads resold 10,000 shares at $28 per share.What net effect did the repurchase and the resell of common stock have on the accounting equation?

Advantages of the corporate form that have led to the growth of this form of business ownership include all of the following except: