This exercise will quiz you about terminology used in this chapter. A list of accounting terms with which you should be familiar appears below: Authorized stock Par value stock **Book value per share Payment date Cash dividend Preferred stock Charter Prior period adjustment Corporate capital Privately held corporation Corporation Publicly held corporation Cumulative dividend Record date Declaration date Retained earnings Deficit Retained earnings restrictions Dividend […]

The Jones Corporation uses the cost method of accounting for treasury stock. Which of the following transactions will cause a net decrease in total additional paid-in capital? Sale of treasury stock at a price in excess of cost. Retirement of treasury stock whose cost is in excess of par value but less than the original issuance price. Purchase of treasury stock at a price in […]

What effect does the declaration and distribution of a 10% stock dividend have on the following? Retained Earnings Total Paid-in Capital Total Stockholders” Equity a. Decrease Increase No Effect b. Decrease No Effect No Effect c. Decrease No Effect Decrease d. No Effect No Effect No Effect

Selected information for the Bradley Corporation is as follows: Dec. 31 2013 Dec. 31 2014 Preferred stock, 8%, par $100, noncumulative $250,000 $250,000 Common stock 600,000 800,000 Retained earnings 150,000 370,000 Dividends paid on preferred stock for the year 20,000 20,000 Net income for the year 120,000 240,000 Bradley”s return on common stockholders” equity, (rounded to the nearest percentage) for 2014 is: 25%. 23%. 19%. […]

Balance Sheet – The following beginning balance sheet and statement of cash flows for 2007 are available for Fazzi Company: Balance SheetJanuary 1, 2007 Cash $900 Accounts receivable 2,300 Land 4,900 Equipment $20,000 Less: Accumulated depreciation 9,100 10,900 Total Assets $19,000 Accounts payable $1,600 Notes payable 3,900 Common stock, $5 par 4,500 Additional paid-in capital 1,800 Retained earnings 7,200 Total Liabilities and Stockholders’ Equity $19,000 […]

Erroneous Statement of Cash Flows – The 2007 statement of cash flows for the Andell Company, as developed by its bookkeeper, is shown here: Cash Flows StatementDecember 31, 2007 Inflows of Cash Operating Activities Net income $10,600 Add: Proceeds from sale of equipment 4,400 Proceeds from issuance of stock 4,300 Less: Payment for investment in bonds 6,000 Payment of long-term note 5,000 Net cash inflows […]

Partially Completed Worksheet (Spreadsheet) – The Hanks Company has prepared the following changes in account balances for the worksheet to support its 2007 statement of cash flows: A B C D Worksheet Entries Debit Credit Account Title Increase (Decrease) Debits Cash $830 Noncash Accounts Accounts receivable 290 Inventory 1,280 Investments 1,550 Land 700 Equipment 2,300 Patents (net) 100 Total $4,870 Credits Accumulated depreciation $350 Accounts […]

Worksheet (Spreadsheet) – The following 2007 information is available for the Payne Company: Comparative Balance Sheets 1-Jan-07 31-Dec-07 Cash $400 $600 Accounts receivable 220 200 Inventory 370 610 Land 250 410 Equipment 2,070 2,200 Less: Accumulated depreciation -310 -400 Total Assets $3,000 $3,620 Accounts payable $800 $500 Notes payable (long-term) 900 720 Common stock, no par 600 1,000 Retained earnings 700 1,400 Total Liabilities and […]

Worksheet (Spreadsheet) and Statement – The following 2007 information is available for the Stewart Company: Condensed Income Statement for 2007 Sales $9,000 Cost of goods sold -6,000 Other expenses -2,000 Loss on sale of equipment -260 Gain on sale of land 400 Net income $1,140 Comparative Balance Sheets December 31,2006 December 31,2007 Cash $700 1,130 Accounts receivable 450 310 Inventory 350 400 Land 300 500 […]

This exercise will illustrate how the components of stockholders” equity should be reported in the balance sheet. Al Gore Corporation”s charter authorizes 200,000 shares of $20 par value common stock, and 50,000 shares of 6% cumulative preferred stock, par value $100 per share. The preferred stock has a call price of $105. The corporation engaged in the following stock transactions between the date of incorporation […]