LO 14.1How many shares of stock should your new corporation authorize? How did you arrive at your number?
LO 14.1What are some of the reasons a business owner might choose the corporate form of business?
LO 14.2The following data was reported by Saturday Corporation:
- Authorized shares: 30,000
- Issued shares: 25,000
- Treasury shares: 5,000
How many shares are outstanding?
LO 14.2When corporations issue stock in exchange for professional services, what account(s) should be debited and what account(s) should be credited?
LO 14.3On April 2, West Company declared a cash dividend of $0.50 per share. There are 50,000 shares outstanding. What is the journal entry that should be recorded?
LO 14.3Assuming the same facts as Exercise 14.10, what is the journal that should be recorded on May 5, the date of payment?
LO 14.3When does a corporation incur a liability for a dividend?
LO 14.4Your friend has questions about retained earnings and dividends. How do you explain to him that dividends are paid out of retained earnings?
LO 14.4What types of transactions reduce owner’s equity? What types of transactions reduce retained earnings? What do they have in common?
LO 14.4Retained earnings may be restricted or appropriated. Explain the difference between the two and give an example of when each may be used.
LO 14.5Where is EPS disclosed for publicly traded companies?
LO 14.5What information do you need to calculate the weighted average common shares outstanding?