Business Types & Characteristics
An unincorporated association of two or more people to pursue a business for profit as co-owners.
What is a partnership?
How partnership income is allocated among partners if they do not agree to anything in the partnership agreement.
The date that the company declares a dividend and a liability is recorded using common dividends distributable.
What is the date of declaration?
Cooper Company earned net income of $291,600 this year. There were 44,000 weighted-average common shares outstanding, and preferred shareholders received a $54,000 cash dividend. This is the company's Basic Earnings per Share.
What is $5.40 per share?
When a company buys back its own stock, it's called this.
What is treasury stock?
Each partner can bind the partnership to contracts.
What is Mutual Agency?
Danz and Curtz began a partnership by investing $21,000 and $49,000, respectively. During its first year, the partnership earned $160,000. This is the income allocated to Curtz if the partners agreed to share income and loss in proportion to their initial investments.
What is $112,000?
Description for this journal entry:
Common Dividends Distributable $5,000
Cash $5,000
What is the date of distribution for a cash dividend?
The statement where prior period adjustments are reflected.
What is the Statement of Retained Earnings?
The distribution of additional shares to stockholders according to their percent ownership is known this.
What is a stock split?
This type of business includes the following characteristics:
-Limited life
-Mutual agency
-Unlimited liability
-Voluntary association
What is a general partnership?
Sand, Black & Sabel are partners and share income and losses equally. The partners decide to liquidate the partnership when their capital balances are as follows: Sand, $121,300; Black, $142,500; and Sabel, $145,700. On June 30, the liquidation resulted in a loss of $420,000. This is the partner who has a deficit and the amount that he/she owes to the company.
What is Sand and $18,700?
This size of stock dividend requires capitalization to retained earnings in the amount of the market value (vs. the par or stated value)
What is a small stock dividend?
Maxine Company had prior year ending retained earnings of $55,000. Their net income for the year was $22,000 and $10,000 in cash dividends was declared. This is the ending retained earnings balance.
What is $67,000?
ABC Corporation issues 23,000 shares of its common stock for $55,000 cash on December 9. If the stock has neither par or stated value, this is the account and amount that will be credited.
What is Common Stock, no par value for $55,000?
. This contract normally includes details of the partners’ (1) names and contributions, (2) rights and duties, (3) sharing of income and losses, (4) withdrawal arrangement, (5) dispute procedures, (6) admission and withdrawal of partners, and (7) rights and duties in the event a partner dies. Although it should be in writing, it is binding even if it is only expressed verbally
What is a Partnership Agreement?
Smith and Purple began a partnership by investing $40,000 and $60,000, respectively. During its first year, the partnership earned $200,000. This is the amount of net income that would be allocated to Purple if the partners agreed to share income and loss in proportion to their initial investments.
What is $120,000?
$40,000 + $60,000 = $100,000
Purple $60,000/$100,000 = 60%
60% x $200,000 net income = $120,000
The journal entry when Apple Corporation declares a 10% stock dividend on February 3rd when the market value was $12 per share. Prior to the stock dividend declaration, they had 16,700 shares of $3 par value stock.
What is:
Retained Earnings $20,040
Common Stock Dividend Distributable $5,010
Paid-in Capital in Excess of Par Value $15,030
?
Dalton Corporation started the year with 600,000 shares outstanding. On February 1, they bought back 50,000 shares of their own stock. On March 15 they sold 5,000 shares of treasury stock. On June 22, they sold another 5,000 shares of treasury stock. This is the number of shares they had outstanding as of June 30.
What is 560,000?
Sally Corporation issues 44,000 shares of its common stock for $90,000 cash on December 9. If the stock has a $2 par value, these are the accounts and amounts that will be credited.
What is:
Common Stock, $2 par value for $88,000
Paid-in Capital in excess of par value, common stock for $2,000
?
In a business liquidation, this is what happens to the assets.
What is they are sold and the cash from the sale is used to pay creditors (anything remaining is then split between the owners)?
Pearl and Noble began a partnership by investing $32,000 and $23,000, respectively. During its first year, the partnership earned $275,000. The partners agreed to share income by giving a $43,000 per year salary allowance to Pearl, a $22,000 per year salary allowance to Noble, 10% interest on their initial capital investments, and the remaining balance shared equally. This is the income allocated to Pearl.
What is $148,450?
McGuire's outstanding stock consists of 70,000 shares of cumulative 5.5% preferred stock with a $4 par value and also 150,000 shares of common stock with a $2 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends:
Year 1 total cash dividends $12,000
Year 2 total cash dividends $14,000
Year 3 total cash dividends $30,000
Year 4 total cash dividends $55,000
These are the dividend amounts allocated to preferred and common stockholders in Year 3.
What is $20,200 for preferred and $9,800 for common?
Common stock + paid-in capital in excess, common stock + retained earnings - cost of treasury stock
What is total stockholders equity?
Jazz Corporation issues 32,000 shares of its common stock for $70,000 cash on June 12. If the stock has a $3 stated value, these are the accounts and amounts that will be debited.
What is:
Cash for $70,000
Paid-in Capital in excess of par value, common stock for $26,000
?