Question: The number of shares that a corporation's charter allows it to sell is referred to as:
Answer: Authorized Stock
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Question: Stockholders' Equity consists of which of the following?
Answer: Paid-in capital and retained earnings
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Question: A company issued 60 shares of $100 par value common stock for $7,000 cash. The journal entry to record the issuance is:
Answer: Debit Cash $7,000; credit Common Stock $6,000; credit Paid-in Capital in Excess of Par Value, Common Stock $1,000.
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Question: A corporation issued 5,000 shares of $10 par value common stock in exchange for some land with a market value of $70,000. The entry to record this exchange is:
Answer: Debit Land $70,000; credit Common Stock $50,000; credit Paid-in Capital in Excess of par value, Common Stock $20,000
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Question: A premium on common stock:
Answer: occurs when a corporation sells its stock for more than par or stated value.
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Question: A liability for dividends exists:
Answer: On the Date of Declaration.
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Question: A company's board of directors votes to declare a cash dividend of $0.75 per share of common stock. The company has $15,000 shares authorized, 10,000 Issued, and 9,500 shares outstanding. The total amount of the cash dividend is:
Answer: $7,125
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Question: A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding. The journal entry to record the declaration of the cash dividend is:
Answer: Debit Retained Earnings $12,000; credit Common Dividend Payable $12,000.
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Question: Stock that was reacquired and is still held by the issuing corporation is called:
Answer: Treasury Stock
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Question: Hutter Corporation declared a $0.50 per share cash dividend on its common shares. The company has 20,000 shares authorized, 9,000 shares issued, and 8,000 shares of common stock outstanding. The journal entry to record the dividend declaration is:
Answer: Debit Common Dividends Payable $4,000; credit Cash $4,000.
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