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Exam 18: Shareholders Equity

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Question 51

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What was the average exercise price per share of stock issued under option plans in 2007?

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Question 52

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The owners of a corporation are its shareholders. If a corporation has only one class of shares, they typically are labeled common shares. Each of the following are ownership rights held by common shareholders, unless specifically withheld by agreement except:

A) The right to vote on policy issues.
B) The right to share in profits when dividends are declared (in proportion to the percentage of shares owned by the shareholder) .
C) The right to dividends equal to a stated rate time par value (if dividends are paid) .
D) The right to share in the distribution of any assets remaining at liquidation after other claims are satisfied.

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

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Question 53

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Noncash assets received as consideration for the issue of stock are always valued based on the fair value of the stock.

At the beginning of 2007, Emily Corporation issued 10,000 shares of $100 par, 5%, cumulative, preferred stock for $110 per share. No dividends have been paid to preferred shareholders. What amount of dividends will a shareholder owning 100 shares receive in 2009 if Emily pays $1,000,000 in dividends?

Dividends in arrears on cumulative preferred stock are reported as current liabilities.

Poodle Corporation was organized on January 3, 2009. The firm was authorized to issue 100,000 shares of $5 par common stock. During 2009, Poodle 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 2009?

The Model Business Corporation Act:

During its first year of operations, Criswell Inc. completed the following transactions relating to shareholders' equity. Jan. 5: Issued 300,000 of its common shares for $8 per share and 3,000 preferred shares at $110. Feb. 12: Issued 50,000 shares of common stock in exchange for equipment with a known cash price of $310,000. The articles of incorporation authorize 5,000,000 shares with a par value of $1 per share of common and 1,000,000 preferred shares with a par value of $100 per share. Required: Record the above transactions in general journal form.

Outstanding common stock is:

The declaration and issuance of a common stock dividend:

When a company issues a stock dividend which of the following would be affected?

Montgomery & Co., a well established law firm, provided 500 hours of its time to Fink Corporation in exchange for 1,000 shares of Fink's $5 par common stock. Mitchell's usual billing rate is $700 per hour, and Fink's stock has a book value of $250 per share. By what amount will Fink's Paid-in capital - excess of par increase for this transaction?

Which of the following statements is true when dividends are not declared or paid on cumulative preferred stock?

When stock is issued for consideration other than cash, what is the measurement objective?

On October 15, 2009, a 5% stock dividend was declared and distributed. The market value of the common stock on this date was $32 per share. Fractional share rights represented 100,000 shares. Cash was paid in lieu of issuing fractional share rights. On the date of declaration and payment, the company had 10 million shares of common stock outstanding. The par value of the common shares was $5. Required: Prepare any necessary journal entries to record the above events.

When stock is issued in exchange for property, the best evidence of fair value might be any of the following except:

The changes in account balances for Allen Inc. for 2009 are as follows: Assuming the only changes in retained earnings in 2009 were for net income and a $25,000 dividend, what was net income for 2009?

Preferred shares that are participating may:

Paid-in capital must consist solely of amounts invested by shareholders.

How many shares of treasury stock did Stubblefield use during 2006, and for what purpose(s)?