Question 1

Houston Corporation has the following stock outstanding:  In 2012,Houston paid $330,000 in dividends.No dividends were paid in 2011 or 2010.
Required:
a)Compute the total amount of dividends that was paid to each class of stock.
b)Compute the amount of dividends per share for each class of stock.

Accepted Answer

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Question 2

On January 1,2012,the organizers of the Parsons Corporation obtained their charter and issued 10,000 shares of $1 par common stock for $4 per share.During 2012,the corporation earned $30,000 in cash revenue and paid $20,000 in cash expenses,not including income tax.The income tax rate was 30%,and the company's income tax expense was $3,000.The company declared and paid cash dividends totaling $2,000.Using the above information,prepare an income statement and a balance sheet for the Parsons Corporation.

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Question 3

Austin Corporation was authorized to issue 100,000 shares of $10 par common stock.During 2012 Austin issued 30,000 shares at a market price of $15 per share.On December 1,2012,Austin declared a cash dividend of $2 per share payable on December 30 to stockholders of record as of December 15.
Required:
a)Indicate effect on financial statements on the date of declaration,date of record,and date of payment of the cash dividends.Use the model below.  b)What kind of transaction is the declaration of a cash dividend?
c)What kind of transaction is the payment of a cash dividend?

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Question 4

Discuss a reason why a corporation might "split" its common stock.

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Question 5

Liu Corporation's balance sheet reflected the following information.  Assuming all the stock was issued in a single transaction,what was the issue price per share of the stock?

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Question 6

Explain the significance of a high price-earnings ratio.

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Question 7

The corporate charter of Llano Corporation authorizes the issuance of 25,000 shares of 5% cumulative preferred stock,$50 par,and 200,000 shares of $10 par common stock.At the end of the current year,the titles and balances of stockholders' equity accounts are as follows:  Llano declared dividends of $400,000 for the current year.
Required:
a)What is the amount of the annual dividend per share for preferred stock?
b)If there are two years of preferred dividends in arrears at the beginning of the current year,what total amount of dividends will be paid to the preferred shareholder?
c)What total amount will be paid to the common shareholder if there are two years of preferred dividends in arrears at the beginning of the year?

Accepted Answer

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Question 8

Anstendig Corp.has 250,000 shares of common stock authorized.It has issued 75,000 shares and has reacquired 12,000 of these shares as treasury stock.Anstendig subsequently declared a cash dividend of $3 per share.What is the total amount of dividends that were declared?

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Question 9

Davis Corporation had 25,000 shares of $10 par value common stock outstanding and declared a two-for-one stock split.How many shares of stock would then be outstanding and what would be the par value of the new stock?

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Question 10

Discuss a few common reasons for decreases in the market price of a corporation's common stock.

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Question 11

For 2012,the Hilary Corporation had beginning and ending Retained Earnings balances of $198,054 and $231,000,respectively.Also during 2012,the corporation declared and paid cash dividends of $29,000 and issued stock dividends valued at $16,000.Assuming that no other items affected Retained Earnings and that total expenses were $32,916,what was the amount of revenues for 2012?

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Question 12

The Garza Company was started on January 1,2012 as a sole proprietorship.The initial investment from J.Garza,the owner,was $40,000.During 2012,the business earned $30,000 in cash revenue and paid $20,000 in cash expenses.Ms.Garza withdrew from the business $2,000 for her personal use.Using the above information,prepare an income statement,a capital statement,and a balance sheet for the Garza Company.

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Question 13

Show the effect of a stock dividend on the accounting equation.

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Question 14

Describe how the following transactions affect the balance sheet,income statement,and statement of cash flows of Askins,Inc.:
a)On 2/1/12,Askins purchased for cash,in the open market,1,000 shares of its own common stock at $40 per share.
b)On 7/1/12,200 of the shares purchased on 2/1/12 were sold at $43 per share.

Accepted Answer

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Question 15

Allen Corporation was organized on July 15,2012.It was authorized to issue 150,000 shares of $25 par value common stock and 50,000 shares of 6% cumulative preferred stock.The preferred stock had a stated value of $50 per share.The following stock transactions relate to Allen Corporation.
Issued 55,000 shares of common stock for $33 per share.
Issued 2,750 shares of the class A preferred stock for $62 per share.
Issued 27,500 shares of common stock for $35 per share.
Required:
a)Indicate the effect of each of these transactions on Allen's financial statements.Include dollar amounts in the model,below.After recording the three transactions,calculate column totals.
b)After these transactions have been recorded,what is the total amount of stockholders' equity?
c)After these transactions have been recorded,how many shares of common stock are outstanding?

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The answer of Allen Corporation was organized on July 15,2012.It...

Question 16

Indicate how each of the following transactions affects the financial statements model,below:
a)Issued 40,000 shares of common stock with a $20 par value for cash of $25 per share.
b)Purchased 400 shares of treasury stock (common stock)at $30 per share.
c)Resold 100 shares of the treasury stock at $35 per share.

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Question 17

Fredericksburg Corporation had issued and outstanding 150,000 shares of $8 par value common stock at January 1,2012 with a retained earnings balance of $750,000.Fredericksburg issued a 12% stock dividend to its common shareholders.At the time of the dividend,the market value of the stock was $17 per share.
Required:
a)What is the total dollar amount of the stock dividend?
b)Describe how the stock dividend will affect Fredericksburg's stockholders' equity accounts.
c)How many shares of common stock are outstanding after the stock dividend?

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Question 18

Discuss possible reasons why a corporation may establish an appropriation of retained earnings.

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Question 19

The Harlan-Wells Company was started on January 1,2012 as a partnership.The initial investments from the two partners were $20,000 each.During 2012,the Harlan-Wells Company earned $30,000 in cash revenue and paid $20,000 in cash expenses and the partners withdrew $1,000 each for their personal use.The partnership agreement calls for equal sharing of net income or loss.Using only the above information,prepare an income statement,a capital statement,and a balance sheet for the Harlan-Wells Company.

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The answer of The Harlan-Wells Company was started on January...

Question 20

On what date do dividends become a legal liability of a corporation?

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Quiz 8: Proprietorships, partnerships, and Corporations

Houston Corporation has the following stock outstanding: In 2012,Houston paid $330,000 in dividends.No dividends were paid in 2011 or 2010. Required: a)Compute the total amount of dividends that was paid to each class of stock. b)Compute the amount of dividends per share for each class of stock.