Question 1

On May 15 Canadian Falcon declares a quarterly cash dividend of $0.15 per share payable on June 10 to all stockholders of record on May 31. Record Canadian Falcon's declaration and payment of cash dividends for its 200,000 shares of common stock.

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Question 2

Explain the difference between authorized, issued, and outstanding shares.

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Question 3

Environmental Designs issues 10,000 shares of its $1 par value common stock at $25 per share. (1) Record the issuance of the stock. (2) Record the issuance of the stock assuming it is no-par value stock.

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Question 4

Court Casuals has the following beginning balances in its stockholders' equity accounts on January 1, 2012: Common Stock, $100,000; Additional Paid-in Capital, $4,100,000; and Retained Earnings, $3,000,000. Net income for the year ended December 31, 2012, is $800,000. Court Casuals has the following transactions affecting stockholders' equity in 2012:

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Question 5

Corporations typically do not start raising capital by issuing stock to the general public. What are the common stages of equity financing leading to an initial public offering (IPO)?

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Question 6

Donnie Hilfiger has the following balances in its stockholders' equity accounts on December 31, 2012: Treasury Stock, $375,000; Common Stock, $350,000; Preferred Stock, $1,200,000; Retained Earnings, $1,675,000; and Additional Paid-in Capital, $3,150,000. Prepare the stockholders' equity section of the balance sheet for Donnie Hilfiger as of December 31, 2012.

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Question 7

Indicate whether each of the following transactions increases (+), decreases (-), or has no effect (NE) on total assets, total liabilities, and total stockholders' equity. $$\begin{array}{l}
\begin{array} { l c c c } 
\text { Transaction } & \begin{array} { c } 
\text { Total } \
\text { Assets }
\end{array} & \begin{array} { c } 
\text { Total } \
\text { Liabilities }
\end{array} & \begin{array} { c } \text { Total }\
\text { Stockholders' } \
\text { Equity }
\end{array} \
\text { Issue common stock } & \
\text { Issue preferred stock } &  \
\text { Repurchase treasury stock } &  \
\text { Sale of treasury stock } &  \
\text { Declare cash dividend } & \
\text { Pay cash dividend } &  \
100 \% \text { stock dividend } &\
\text { 2-for-1 stock split } &
\end{array}
\end{array}$$

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Question 8

Prom Night Formal Wear has the following stockholders' equity accounts at December 31, 2012: Common Stock, $1 par value, 2,000,000 shares; Additional Paid-in Capital, $22 million; Retained Earnings, $15 million; and Treasury Stock, 50,000 shares, $1.25 million. Prepare the stockholders' equity section of the balance sheet.

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Question 9

Explain why preferred stock often is said to have a mixture of attributes somewhere between common stock and bonds.

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Question 10

Court Casuals has 100,000 shares of common stock outstanding as of the beginning of 2012 and has the following transactions affecting stockholders' equity in 2012.  Record each of these transactions.

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Question 11

Indicate whether each of the following transactions increases (+), decreases (-), or has no effect (NE) on total assets, total liabilities, and total stockholders' equity.

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Question 12

Northwest Clothing Supply has the following transactions during the year related to stockholders' equity:

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Question 13

Describe the primary advantages and disadvantages of a corporation in comparison to a sole-proprietorship or partnership.

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Question 14

Contrast the effects of a cash dividend and a stock dividend on total assets, total liabilities, and total stockholders' equity.

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Question 15

Hamilton International issues 5,000 shares of its $1 par value common stock to provide funds for further expansion. If the issue price is $15 per share, what is the entry to record the issuance of the stock?

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Question 16

The financial statements of Heatwave Athletic Wear include the following selected data ($ in millions): Sales, $22,502; Net income $875; Beginning stockholders' equity $3,567; Ending stockholders' equity, $4,102. Calculate the return on equity.

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Question 17

The financial statements of Trail Apparel include the following selected data (in millions):

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Question 18

Match between columns
                        Premises:    Accumulated deficit. 
   Value stocks. 
   Growth stocks. 
   100% stock dividend. 
   Stockholders' equity section of the balance sheet. 
   PE ratio. 
   Statement of stockholders' equity. 
   Retained earnings. 
   Return on equity. 
   Treasury stock.

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Question 19

Match between columns
                        Premises:    Convertible
   Cumulative. 
   Redeemable.

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Question 20

Match between columns
                        Premises:    A large stock dividend that includes a reduction in the par or stated value per share. 
   Distributions by a corporation to its stockholders. 
   Describes the nature of the firm's business activities, the shares to be issued, and the composition of the initial board of directors. 
   Traces the line of authority for a typical corporation. 
   Provide additional financing, often in the millions, for a percentage ownership in the company. 
   A mixture of attributes somewhere between common stock and bonds payable. 
   The portion of the cash proceeds above par value. 
   Additional shares of the companies' own stock given to stockholders. 
   Summarizes the changes in the balance in each stockholders' equity account over a period of time. 
   Represents all net income, less all dividends, since the company began.

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Quiz 10: Stockholders Equity