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How is the issuance of stock accounted for? When issuing common stock at par value, the journal entry would be to debit ___ _______ and

  1. How is the issuance of stock accounted for?
  1. When issuing common stock at par value, the journal entry would be to debit __________ and credit __________________.
  1. How is treasury stock accounted for?
  1. What is treasury stock?
  2. Why might a company later reacquire some of its own stock as treasury stock?
  3. ABC company recently repurchased some of its own stock as treasury stock for $1,000. The company is now selling the treasury stock for $1,100. The journal entry would be:

Date

Accounts and Explanation

Debit

Credit

  1. How are dividends and stock splits accounted for?
  1. Journalize for the 1) declaration of cash dividend of $1,000 and 2) payment of cash dividend:

Date

Accounts and Explanation

Debit

Credit

1)

2)

  1. Why might some companies issue stock dividends instead of cash dividends?
  2. ABC Company currently has 100,000 shares of common stock with a par value of $2 before a 2-for-1 split. What is the number of shares and par value after the split?
  1. How is the complete corporate income statement prepared?
  1. What may appear on a corporations income statement that generally does not appear for smaller business?

  1. How is equity reported for a corporation?
  1. What is included on the statement of retained earnings?

  1. The statement of stockholders equity reports the changes in all ___________ accounts.

  1. How do we use stockholders equity ratios to evaluate business performance?
    1. Use the following information for ABC Company to calculate the EPS, price/earnings ratio, and return on common stockholders equity:

Net Income = $10,000 Preferred Dividends = $2,000 Average Common Stockholders Equity = $300,000 Number of Common Shares Outstanding = 20,000 shares

  1. What is earnings per share?

  1. What is price/earnings ratio assuming the market price is $2 per share?

  1. What is rate of return on common stockholders equity (take percentage to 2 decimal places)?

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