Question 1

To calculate dividends on par-value preferred stock:

Accepted Answer

To calculate dividends on par-value preferred stock, you multiply the number of shares outstanding by the dividend rate and then by the par value per share. This gives the total amount of dividends to be paid to preferred stockholders.

Question 2

Madison Corporation is authorized to issue 3,000 shares of common stock.Record the journal entry for each of the following independent situations.Assume Madison issues 1,000 shares at $15 on August 31.
a)Common stock has a $10 per share par value.
b)Common stock has no par value and no stated amount.
c)Common stock is no-par stock with a stated value of $8 per share.

Accepted Answer

The answer of Madison Corporation is authorized to issue 3,000...

Question 3

Alpha-Omega Industries has 30,000 shares of $12 par common stock and 15,000 shares of $50 par,5% preferred stock outstanding.Total dividends available are $162,000.Compute the dividends to be distributed to preferred and common stockholders under the following condition.
The preferred stock is participating and cumulative with no dividends distributed last year.

Accepted Answer

The answer of Alpha-Omega Industries has 30,000 shares of $12...

Question 4

Jane Kathryn has 30,000 shares outstanding of $10 par value,10% preferred stock and 100,000 shares outstanding $5 par value common stock.In the first 3 years of operations,the company paid dividends in Year 1,$0;Year 2,$40,000;Year 3,$100,000.Calculate the dividend paid to preferred and common stockholders under the following independent situations:

Accepted Answer

The answer of Jane Kathryn has 30,000 shares outstanding of...

Question 5

The par value of stock represents the market value of the capital of the corporation.

Accepted Answer

The par value of stock represents the minimum price at which shares can be sold and has no relation to the market value of the corporation's capital.

Question 6

Prepare the journal entries for Mayhem Manufacturing:
June 10 Incurred organization costs totaling $7,500
June 14 Issued 10,000 shares of $11 par value common stock for $120,000
June 22 Issued 3,000 shares of 7%,$30 par value preferred stock for $120,000

Accepted Answer

The answer of Prepare the journal entries for Mayhem Manufacturing:
June...

Question 7

Alpha-Omega Industries has 30,000 shares of $12 par common stock and 15,000 shares of $50 par,5% preferred stock outstanding.Total dividends available are $162,000.Compute the dividends to be distributed to preferred and common stockholders under the following condition.
The preferred stock is participating and non-cumulative with no dividends distributed last year.

Accepted Answer

The answer of Alpha-Omega Industries has 30,000 shares of $12...

Question 8

Carmen Corporation issued 200 shares of its $5 par value stock to an attorney.The shares are in full settlement for $10,000 of legal services to help set up the company.Prepare the journal entry for the stock issuance.

Accepted Answer

The answer of Carmen Corporation issued 200 shares of its...

Question 9

Number of preferred shares times market value per share times dividend rate is the formula used to determine the dividends to be paid.

Accepted Answer

The formula used to determine the dividends to be paid is number of preferred shares times dividend rate, not market value per share. The market value per share is only relevant in determining the total value of the preferred shares.

Question 10

Common Stock is an asset.

Accepted Answer

Common stock is considered equity, not an asset, on a company's balance sheet. It represents ownership interest in the company.

Question 11

Alpha-Omega Industries has 20,000 shares of $10 par common stock and 10,000 shares of $40 par,5% preferred stock outstanding.Total dividends available are $62,000.Compute the dividends to be distributed to preferred and common stockholders under the following condition.
The preferred stock is nonparticipating and cumulative with no dividends distributed last year.

Accepted Answer

The answer of Alpha-Omega Industries has 20,000 shares of $10...

Question 12

When a company distributes some of their profits to shareholders,it is in the form of:

Accepted Answer

When a company distributes some of their profits to shareholders, it is in the form of dividends. Cumulative stock refers to stock that accumulates dividends if they are not paid out, reduced taxes is not a form of profit distribution, and bonds are a separate type of investment that does not involve direct profit sharing.

Question 13

Jane Kathryn has 15,000 shares outstanding of $15 par value,5% preferred stock and 100,000 shares outstanding $10 par value common stock.In the first 3 years of operations,the company paid dividends in Year 1,$0;Year 2,$10,000;Year 3,$20,000.Calculate the dividend paid to preferred and common stockholders under the following independent situations:

Accepted Answer

The answer of Jane Kathryn has 15,000 shares outstanding of...

Question 14

A company issues no-par value with no stated value stock.Therefore,the company does not have a minimum legal capital amount.

Accepted Answer

The answer of A company issues no-par value with no...

Question 15

Alpha-Omega Industries has 20,000 shares of $10 par common stock and 10,000 shares of $40 par,5% preferred stock outstanding.Total dividends available are $62,000.Compute the dividends to be distributed to preferred and common stockholders under the following condition.
The preferred stock is nonparticipating and non-cumulative with no dividends distributed last year.

Accepted Answer

The answer of Alpha-Omega Industries has 20,000 shares of $10...

Question 16

Birch Company issued 200 shares of common stock with a par value of $10 per share in exchange for equipment with a fair market value of $4,000.Record the journal entry for the stock issuance.

Accepted Answer

The answer of Birch Company issued 200 shares of common...

Question 17

Journalize the following independent transactions:
a)Casey Company sells 300 shares of $20 par-value common stock at $20.
b)Jacob Corporation sells 100 shares of $20 par-value common stock at $30.
c)Moss Inc.sells 40 shares of no-par common stock with a $20 stated value for $30 per share.

Accepted Answer

The answer of Journalize the following independent transactions:
a)Casey Company sells...

Question 18

R.Red formed a corporation with an authorization of 20,000 shares of $50 par,6% non-cumulative preferred stock and 100,000 shares of $10 par common stock.The following selected transactions were completed during the first year of operations.Journalize the transactions omitting explanations.

Accepted Answer

The answer of R.Red formed a corporation with an authorization...

Question 19

Journalize the following stock transactions for Rick Corporation.
 July 22 Issued 10,000 shares of $\$ 6$ par common stock for $\$ 45,000$ cash.
28 Issued 6,000 shares of $\$ 4$ par common stock for $\$ 35,000$ cash.
31 Issued 4,000 shares of $\$ 10$ par, $7 \%$ preferred stock for $\$ 50,000$ cash.

Accepted Answer

The answer of Journalize the following stock transactions for Rick...

Question 20

Mack Corporation has been issued a charter by the state of New Hampshire.This charter gives Mack the authority to issue 20,000 shares of $20 par value preferred stock and 100,000 shares of $5 par value common stock.Journalize the entries listed below.
 June 1 Issued 4,000 shares of preferred stock at $\$ 25$ per share.
4 Issued 5,000 shares of common stock at $\$ 15$ per share.
13 Issued 6,000 shares of common stock at $\$ 20$ per share.
21 Issued 1,000 shares of preferred stock at $\$ 35$ per share.

Accepted Answer

The answer of Mack Corporation has been issued a charter...

Quiz 18: Corporations: Organizations and Stock