Question 1

Fetzer Company declared a $0.55 per share cash dividend. The company has 200,000 shares authorized, 190,000 shares issued, and 8,000 shares in treasury stock. The journal entry to record the payment of the dividend is:

Accepted Answer

The answer of Fetzer Company declared a $0.55 per share...

Question 2

What are the rights generally granted to common stockholders?

Accepted Answer

The answer of What are the rights generally granted to...

Question 3

West Company declared a $0.50 per share cash dividend. The company has 190,000 shares issued, and 10,000 shares in treasury stock. The journal entry to record the payment of the dividend is:

Accepted Answer

The answer of West Company declared a $0.50 per share...

Question 4

Fetzer Company declared a $0.55 per share cash dividend. The company has 200,000 shares authorized, 190,000 shares issued, and 8,000 shares in treasury stock. The journal entry to record the dividend declaration is:

Accepted Answer

The answer of Fetzer Company declared a $0.55 per share...

Question 5

Prior to June 30, a company has never had any treasury stock transactions. A company repurchased 100 shares of its common stock on June 30 for $40 per share. On July 20, it reissued 50 of these shares at $46 per share. On August 1, it reissued 20 of the shares at $38 per share. What is the balance in the Treasury Stock account on August 2?

Accepted Answer

The balance in the Treasury Stock account on August 2 is calculated as follows:

- On June 30, the company repurchased 100 shares at $40 per share, resulting in a debit of $4,000 to the Treasury Stock account.
- On July 20, the company reissued 50 of these shares at $46 per share, resulting in a credit of $2,300 to the Treasury Stock account (50 shares x $46 per share).
- On August 1, the company reissued 20 of the shares at $38 per share, resulting in a credit of $760 to the Treasury Stock account (20 shares x $38 per share).
- The remaining 30 shares are held in Treasury Stock and have a cost of $1,940 ($4,000 - $2,300 - $760). This amount represents the balance in the Treasury Stock account on August 2.

Therefore, the correct answer is C) $1,200.

Question 6

Sweet Company's outstanding stock consists of 1,000 shares of cumulative 5% preferred stock with a $100 par value and 10,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. $\begin{array}{ll}
&\text { Dividend Declared }\\ 
\text { year 1 } & \$ 2,000 \
\text { year 2 } & \$ 6,000 \
\text { year 3 } & \$ 32,000
\end{array}$

- 
The total amount of dividends paid to preferred and common shareholders over the three-year period is:

Accepted Answer

The preferred stock requires $5,000 annually (5% of $100,000). Over three years, $15,000 is needed for preferred dividends. Year 1: $2,000 to preferred, $3,000 carried over. Year 2: $5,000 to preferred, $3,000 carried over. Year 3: $8,000 to preferred (including $3,000 carried over), $25,000 to common. Total: $15,000 preferred, $25,000 common.

Question 7

All of the following regarding accounting for Treasury Stock under U.S. GAAP and IFRS is true except:

Accepted Answer

Option D is false. Both gains and losses are recognized on retirements of treasury stock under IFRS. All other statements are true.

Question 8

Sweet Company's outstanding stock consists of 1,000 shares of cumulative 5% preferred stock with a $100 par value and 10,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. $\begin{array}{ll}
&\text { Dividend Declared }\\ 
\text { year 1 } & \$ 2,000 \
\text { year 2 } & \$ 6,000 \
\text { year 3 } & \$ 32,000
\end{array}$

-
The amount of dividends paid to preferred and common shareholders in year 3 is:

Accepted Answer

The answer of Sweet Company's outstanding stock consists of 1,000...

Question 9

A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share. The entry to record this transaction would be:

Accepted Answer

The answer of A corporation issued 2,500 shares of its...

Question 10

Prior to June 30, a company has never had any treasury stock transactions. A company repurchased 100 shares of its $1 par common stock on June 30 for $40 per share. On July 20, it reissued 50 of these shares at $46 per share. On August 1, it reissued 20 of the shares at $38 per share.
- What is the journal entry necessary to record the repurchase of stock on June 30?

Accepted Answer

The repurchase of treasury stock is recorded by debiting the Treasury Stock account for the cost of the shares ($4,000) and crediting Cash for the same amount.

Question 11

Fargo Company's outstanding stock consists of 400 shares of noncumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. $\begin{array}{ll}
&\text { Dividend Declared }\\
\text { year 1 } & \$ 20,000 \
\text { year 2 } & \$ 6,000 \
\text { year 3 } & \$ 32,000
\end{array}$ 
The amount of dividends paid to preferred and common shareholders in year 1 is:

Accepted Answer

The answer of Fargo Company's outstanding stock consists of 400...

Question 12

Halverstein Company's outstanding stock consists of 7,000 shares of cumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.  $\begin{array}{lc}
&\text { Dividend Declared }\
\text { Year 1 } & \$  0 \
\text { Year 2 } & \$ 6,000 \
\text { Year 3 } & \$ 32,000
\end{array}$
The amount of dividends paid to preferred and common shareholders in Year 2 is:

Accepted Answer

The answer of Halverstein Company's outstanding stock consists of 7,000...

Question 13

Sweet Company's outstanding stock consists of 1,000 shares of cumulative 5% preferred stock with a $100 par value and 10,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. $\begin{array}{ll}
&\text { Dividend Declared }\\ 
\text { year 1 } & \$ 2,000 \
\text { year 2 } & \$ 6,000 \
\text { year 3 } & \$ 32,000
\end{array}$

- 
The total amount of dividends paid to preferred and common shareholders over the three-year period is:

Accepted Answer

The preferred stock requires $5,000 annually (5% of $100,000). Over three years, $15,000 is needed for preferred dividends. Year 1: $2,000 to preferred, $3,000 carried over. Year 2: $5,000 to preferred, $3,000 carried over. Year 3: $5,000 to preferred, $28,000 to common. Total: $12,000 preferred, $28,000 common.

Question 14

Explain how to compute dividend yield and discuss how it is used in analysis of a company's financial condition.

Accepted Answer

The answer of Explain how to compute dividend yield and...

Question 15

West Company declared a $0.50 per share cash dividend. The company has 190,000 shares issued, and 10,000 shares in treasury stock. The journal entry to record the dividend declaration is:

Accepted Answer

The dividend is declared on outstanding shares, which is 190,000 issued shares minus 10,000 treasury shares, equaling 180,000 shares. The dividend amount is $0.50 per share, so the total dividend is 180,000 shares * $0.50 = $90,000. The journal entry debits Retained Earnings and credits Common Dividends Payable for $90,000.

Question 16

Prior to June 30, a company has never had any treasury stock transactions. A company repurchased 100 shares of its $1 par common stock on June 30 for $40 per share. On July 20, it reissued 50 of these shares at $46 per share. On August 1, it reissued 20 of the shares at $38 per share.
- What is the journal entry necessary to record the reissuance of treasury stock on July 20?

Accepted Answer

The company reissued 50 shares at $46 per share, receiving $2,300 in cash. The treasury stock was originally purchased at $40 per share, totaling $2,000 for 50 shares. The difference of $300 is credited to Paid-in Capital, Treasury Stock.

Question 17

Explain how to calculate the price-earnings ratio and describe how it is used in analysis of a company's financial condition and performance.

Accepted Answer

The answer of Explain how to calculate the price-earnings ratio...

Question 18

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share. The issue price was $10 per share. The entry to record this transaction would be:

Accepted Answer

The entry to record the issuance of no par common stock with a stated value includes debiting the cash received, crediting the common stock at the stated value per share (in this case, $1 per share), and crediting the excess of the issuance price over the stated value to a separate account called "Paid-in Capital in Excess of Stated Value, Common Stock." Therefore, the correct entry to record the issuance of 5,000 shares at $10 per share would be: Debit Cash $50,000; credit Paid-in Capital in Excess of Stated Value, Common Stock $45,000; credit Common Stock $5,000.

Question 19

Prior to May 1, Fortune Company has never had any treasury stock transactions. A company repurchased 100 shares of its common stock on May 1 for $5,000. On July 1, it reissued 50 of these shares at $52 per share. On August 1, it reissued the remaining treasury shares at $49 per share. What is the balance in the Paid-in Capital, Treasury Stock account on August 2?

Accepted Answer

- On May 1, the company bought back 100 shares for $5,000, which reduces the Paid-in Capital, Treasury Stock account by $5,000.
- On July 1, the company reissued 50 of those shares at $52 per share, which generates additional proceeds of $2,600 ($52 x 50) and increases the Paid-in Capital, Treasury Stock account by $2,600.
- On August 1, the company reissued the remaining 50 shares at $49 per share, which generates additional proceeds of $2,450 ($49 x 50) and increases the Paid-in Capital, Treasury Stock account by $2,450.
- Therefore, the balance in the Paid-in Capital, Treasury Stock account on August 2 is $50 ($2,600 - $2,550).

Question 20

What is a corporation? Identify the key advantages and disadvantages of corporations.

Accepted Answer

The answer of What is a corporation? Identify the key...

Quiz 13: Accounting for Corporations

Fetzer Company declared a $0.55 per share cash dividend. The company has 200,000 shares authorized, 190,000 shares issued, and 8,000 shares in treasury stock. The journal entry to record the payment of the dividend is:

What are the rights generally granted to common stockholders?

West Company declared a $0.50 per share cash dividend. The company has 190,000 shares issued, and 10,000 shares in treasury stock. The journal entry to record the payment of the dividend is:

Fetzer Company declared a $0.55 per share cash dividend. The company has 200,000 shares authorized, 190,000 shares issued, and 8,000 shares in treasury stock. The journal entry to record the dividend declaration is:

All of the following regarding accounting for Treasury Stock under U.S. GAAP and IFRS is true except:

A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share. The entry to record this transaction would be:

Explain how to compute dividend yield and discuss how it is used in analysis of a company's financial condition.

West Company declared a $0.50 per share cash dividend. The company has 190,000 shares issued, and 10,000 shares in treasury stock. The journal entry to record the dividend declaration is:

Explain how to calculate the price-earnings ratio and describe how it is used in analysis of a company's financial condition and performance.

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share. The issue price was $10 per share. The entry to record this transaction would be:

What is a corporation? Identify the key advantages and disadvantages of corporations.