Vocabulary
The __________ reports the changes in all stockholders' equity accounts during the period
Statement of Stockholders' Equity
What are the two types of stock issued by a corporation?
Common Stock and Preferred Stock
Give the amount/accounts debited and credited
Issued 3,000 shares of $20 par common stock at $20 per share
Debit: Cash in Bank, $60,000
Credit: Common Stock, $60,000
T/F
A company uses the same accounts for dividends paid on common and preferred stock
False
Do dividends declared increase or decrease retained earnings?
Decrease
The per-share dollar amount printed on the stock certificates
Par Value
If a corporation issues only one class of capital stock, which type is offered?
Common Stock
Give the amount/accounts debited and credited
Issued 1,500 shares of $20 par common stock at $25 per share
Debit: Cash in Bank, $37,500
Credit: Common Stock, $30,000
Credit: Paid-In Capital Excess of Par, $7,500
What are the three important dates in the dividend process?
Date of declaration
Date of record
Date of payment
Why are dividends accounts not listed in the stockholders' equity section of the balance sheet?
They are temporary accounts closed to Retained Earnings at the end of the year
A distribution of cash to stockholders
Dividend
What are the three ways stockholders participate in the corporation?
Elect board of directors
Share in earnings
Share in assets should the corporation go out of business
Give the amount/accounts debited and credited
Issued 200 shares of preferred 9% stock, $100 par, at $100 per share
Debit: Cash in Bank, $20,000
Credit: Preferred Stock, $20,000
Give the amount/accounts debited and credited
Declared a $2,000 dividend for common stockholders
Debit: Dividends - common, $1,500
Credit: Dividends Payable - common, $1,500
A company issued $25,000 in dividends to common stockholders, $150,000 to preferred stockholders, has Paid-in Capital in Excess of Par of $7,500 and has Retained Earnings totaling $182,500. What is the total stockholders' equity?
A corporation whose stock is widely held, has a large market, and is usually traded on a stock exchange
Publicly Held Corporation
What are the two advantages preferred stockholders possess over common stockholders?
Receive dividends first
Given preference of assets should the company go out of business
A company sells 2,500 shares of $10 par common stock and receives $37,500. How much did each share sell for? What was the amount of paid-in capital in excess of par?
$15
$12,500
Give the amount/accounts debited and credited
Issued check 1371 for $1,500 in payment of the dividend on the common stock declared
Debit: Dividends Payable - Common, $1,500
Credit: Cash in Bank, $1,500
Why do Dividends Payable accounts typically have a zero balance on the balance sheet?
Corporations pay dividends shortly after declaring them.
The __________ govern and are responsible for the affairs of the corporation
Board of Directors
What two rights do preferred stockholders give up?
The right to vote
Right to participate in the control of the corporation
Describe the transaction:
$10 par common stock
Debit: Cash in Bank, $700,000
Credit: Common Stock, $500,000
Credit: Paid-in Cap excess of par, $200,000
Issued 50,000 shares of common stock at $14 per share
On January 28 the board of directors declared an annual cash dividend on 200 shares of preferred $10 stock. What is the total amount of the dividend?
$2,000
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