AC222 Ch 13 Review

1. On April 9, Quick Company reacquired 10,000 shares of its $50 par value common stock at $60. The stock was originally issued at $55. The shares were resold on October 20 at $70.

Provide the entries required to record the reacquisition and the subsequent resale of the stock using the cost method.

2. Bright Company paid cash dividends totaling $160,000 in 2012 and $90,000 in 2013. In 2014, they intend to pay cash dividends of $400,000. Compute the amount of cash dividends per share to be received by common stockholders in 2014 under each of the following assumptions. Treat each case independently. There were no dividends in arrears as of January 1, 2012.

(1) 20,000 shares of common; 75,000 shares of 5 percent, $40 par cumulative preferred. (2) 20,000 shares of common; 60,000 shares of 5 percent, $60 par noncumulative preferred. (3) 25,000 shares of common; 80,000 shares of 5 percent, $80 par cumulative preferred.

3. During 2014, the following transactions related to the capital stock of the Yellow Corp. occurred:

Feb. 10 Declared a $.50 cash dividend on 100,000 shares of preferred stock. March. 15 Paid dividends on preferred stock. April 3 Declared a $.25 cash dividend on 150,000 shares of common stock with a $10 par value. April 25 Paid dividends on common stock. July 30 Split common stock 4-for-1. Aug 19 Purchased 10,000 shares of Yellows own common stock at $40 per share; acquisition recorded at cost.

Provide the entries to record the above transactions.

4. What are the entries for the issue of a stock subscription & when the fully paid common stock is handed over?

5. How does the issuance of preferred stock affect preferred stock outstanding?

6. How does treasury stock impact total stockholders equity?

7. What does the par value of common stock represent?

8. What are stock rights?

9. What type of dividend is a return of a portion of the stockholders original investment?

10. A stock dividend transfers from ____________________________________ to ___________________________.

11. On Oct 10, No Company split its stock 5 for 2 when the market value was $60 per share. Prior to the split, No had 200,000 shares of $20 par value stock. After the split, what would be the par value of the stock?