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A company has 950 shares of $63 par value preferred stock outstanding. It also has 12,000...

A company has 950 shares of $63 par value preferred stock outstanding. It also has 12,000 shares of common stock outstanding, and the total value of its stockholders' equity is $471,450. The company's book value per common share equals:

Multiple Choice

  • $36.41.

  • $34.30.

  • $31.78.

  • $35.33.

  • $39.29.

A corporation issued 200 shares of its $5 par value common stock in payment of a $2,800 charge from its accountant for assistance in filing its charter with the state. The entry to record this transaction will include:

Multiple Choice

  • A $2,800 credit to Common Stock.

  • A $1,800 credit to Paid-in Capital in Excess of Par Value, Common Stock.

  • A $1,000 debit to Organization Expenses.

  • A $2,800 debit to Legal Expenses.

  • A $2,800 credit to Cash.

Global Corporation had 44,000 shares of $20 par value common stock outstanding on July 1. Later that day the board of directors declared a 5% stock dividend when the market value of each share was $29. The entry to record the dividend declaration is:

Multiple Choice

  • Debit Retained Earnings $63,800; credit Common Stock Dividend Distributable $44,000; credit Paid-In Capital in Excess of Par Value, Common Stock $19,800.

  • Debit Retained Earnings $63,800; credit Cash $63,800.

  • Debit Retained Earnings $44,000; credit Common Stock Dividend Distributable $44,000.

  • No entry is made until the stock is issued.

  • Debit Retained Earnings $63,800; credit Common Stock Dividend Distributable $63,800.

In preparing a company's statement of cash flows using the indirect method, the following information is available:

Net income $ 53,000
Accounts payable increased by 18,100
Accounts receivable decreased by 25,100
Inventories increased by 5,200
Depreciation expense 30,300


Net cash provided by operating activities was:

Multiple Choice

  • $81,500.

  • $71,100.

  • $121,300.

  • $131,700.

  • $60,700.

Solutions

Expert Solution

Preferred Stock = 950 x $63 = $59850
Total Equity attributable to Common Stockholders = Total Equity - Preferred Stock
= $471450 - $59850 = $411600

Book Value per share = $411600 /12000 = $34.30
Answer is b. $34.30

Answer is b. $1,800 credit to Paid-in Capital in Excess of Par Value, Common Stock.
i.e. $2800 - (200 x $5) = $1800

5% stock dividend = 44000 x 5% i.e. 2200 shares
Common Stock credit by $ 44000 i.e. 2200 x $20
Paid-In Capital in Excess of Par Value credit by $ 19800 i.e. 2200 x $9 i.e. ($29-20)

Answer is a. Debit Retained Earnings $63,800; credit Common Stock Dividend Distributable $44,000; credit Paid-In Capital in Excess of Par Value, Common Stock $19,800.

Cash flow from Operating Activities
Net Income $               53,000.00
Adjustments
Depreciation $        30,300.00
Change In current assets & Liabilities
Decrease in Accounts Receivable (net) $        25,100.00
Increase in inventories $        -5,200.00
Increase in Accounts payable $        18,100.00
Total Adjustments $               68,300.00
Cash from operating activities $ 1,21,300.00


Answer is c. $121300

ekkarill92 answered 1 year ago
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