Question : 61.Century Corporation issued 400,000 shares of $4 par value common : 1237471

 

 

61.Century Corporation issued 400,000 shares of $4 par value common stock at the time of its incorporation. The stock was issued for cash at a price of $16 per share. During the first year of operations, the company sustained a net loss of $100,000. The year-end balance sheet would show the balance of the Common Stock account to be:   

A. $1,600,000.

 

B. $1,500,000.

 

C. $6,300,000.

 

D. $6,400,000.

$400,000 × $4 = $1,600,000

 

 

 

62.Shore and Gardiner each own 10,000 shares of S&G Corporation $12 par value stock which they purchased for $38 per share directly from the corporation. If Shore sells his stock to Gardiner for $475,000:   

A. Stockholders’ equity of S&G Corporation increases.

 

B. Assets of S&G Corporation increase.

 

C. Stockholders’ equity of S&G Corporation decreases.

 

D. No account of S&G Corporation is affected.

 

 

 

 

On January 1, 2015, Juniper Corporation issued 60,000 shares of its total 200,000 authorized shares of $4 par value common stock for $8 per share. On December 31, 2015, Juniper Corporation’s common stock is trading at $12 per share.

 

63.Refer to the information above. Assuming Juniper Corporation did not issue any more common stock in 2015, how does the increase in value of its outstanding stock affect Juniper?   

A. Juniper should recognize additional net income for 2015 of $4 per share, or $240,000.

 

B. Paid-in capital at December 31, 2015, is $720,000 (i.e., 60,000 shares times $12 per share).

 

C. This increase in market value of outstanding stock is not recorded in the financial statements of Juniper Corporation.

 

D. Each shareholder must pay an additional $4 per share to Jupiter.

 

 

 

 

64.Refer to the information above. Assume Juniper Corporation decides to issue an additional 1,000 shares of its common stock on December 31, 2015. How will the above increase in value affect Jupiter?   

A. Juniper can issue the 1,000 shares at a higher price than the initial 60,000 shares.

 

B. Juniper can sell the 1,000 shares for $12 each, as well as collect an additional $4 per share for each of the 60,000 shares sold initially.

 

C. Juniper reports a gain of $4 per share on all stock sold during the year.

 

D. Paid-in capital at the end of 2015 will be $732,000 (i.e., 61,000 shares times $12 per share).

 

 

 

 

Shown below is information relating to the stockholders’ equity of Grant Corporation at December 31, 2015:  Dividends have been declared and paid for 2015.

 

65.Refer to the information above. Grant’s total legal capital at December 31, 2015, is:   

A. $3,160,000.

 

B. $3,000,000.

 

C. $2,590,000.

 

D. $1,500,000.

$900,000 + $600,000 = $1,500,000

 

 

 

66.Refer to the information above. The total amount of Grant’s paid-in capital at December 31, 2015, is:   

A. $1,960,000.

 

B. $1,090,000.

 

C. $3,460,000.

 

D. $3,050,000.

$600,000 + $900,000 + $60,000 + $1,900,000 = $3,460,000

 

 

 

67.Refer to the information above. The average issue price per share of Grant’s preferred stock was:   

A. $112.

 

B. $100.

 

C. $110.

 

D. $66.

($600,000 + $60,000)/6,000 = $110.

 

 

 

68.Refer to the information above. The book value per share of common stock is:   

A. $7.90.

 

B. $13.17.

 

C. $9.10.

 

D. $15.17.

($900,000 + $60,000 + $1,900,000 + $1,090,000)/300,000 = $13.17

 

 

 

69.Refer to the information above. The balance in Retained Earnings at the beginning of the year was $950,000, and there were no dividends in arrears. Net income for 2015 was $980,000. What was the amount of dividend declared on each share of common stock during 2015?   

A. $2.50.

 

B. $2.08.

 

C. $2.00.

 

D. $2.68.

$950,000 + $980,000 – $1,090,000 = $840,000Preferred dividends (6,000 shares × $6 per share) = $36,000Common stock dividends ($840,000 – $36,000)/300,000 = $2.68 per share

 

 

 

Shown below is information relating to the stockholders’ equity of Brookdale Corporation at December 31, 2015: 

 

70.Refer to the information above. The average issue price per share of the preferred stock was:   

A. $150.

 

B. $165.

 

C. $180.

 

D. $195.

($1,300,000 + $500,000)/10,000 = $180