Assignment
1. The following partial information is taken from the comparative balance sheet of Levi Corporation:
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Shareholders' equity
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12/31/2016
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12/31/2015
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Common stock, $5 par value; 32 million shares authorized; 27 million shares issued and 21 million shares outstanding at 12/31/2016; and ____million shares issued and ____shares outstanding at 12/31/2015.
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$135 million
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$105 million
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Additional paid-in capital on common stock
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519 million
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398 million
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Retained earnings
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196 million
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156 million
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Treasury common stock, at cost, 6 million shares at 12/31/2016 and 4 million shares at 12/31/2015
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(87 million)
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(33 million)
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Total shareholders' equity
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$763 million
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$626 million
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What was the average price of the additional treasury shares purchased by Levi during 2016? (Round your answer to 2 decimal places.)
$27.00 per share.
$14.50 per share.
$8.25 per share.
None of these answer choices is correct.
2. Roberto Corporation was organized on January 1, 2016. The firm was authorized to issue 96,000 shares of $5 par common stock. During 2016, Roberto had the following transactions relating to shareholders' equity:
Issued 9,400 shares of common stock at $5.50 per share.
Issued 20,900 shares of common stock at $9.00 per share.
Reported a net income of $104,000.
Paid dividends of $44,000.
Purchased 3,900 shares of treasury stock at $11.00 (part of the 20,900 shares issued at $9.00).
What is total shareholders' equity at the end of 2016?
$300,900.
$258,000.
$256,900.
$258,700.
3. As of December 31, 2016, Warner Corporation reported the following:
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Dividends payable
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$35,000
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Treasury stock
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540,000
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Paid-in capital - share repurchase
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35,000
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Other paid-in capital accounts
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5,500,000
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Retained earnings
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$4,500,000
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During 2017, half of the treasury stock was resold for $210,000; net income was $540,000; cash dividends declared were $1,350,000; and stock dividends declared were $650,000.
What was shareholders' equity as of December 31, 2016?
$10,035,000.
$9,530,000.
$9,495,000.
$9,460,000.
4. As of December 31, 2016, Warner Corporation reported the following:
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Dividends payable
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$37,000
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Treasury stock
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770,000
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Paid-in capital - share repurchase
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37,000
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Other paid-in capital accounts
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5,700,000
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Retained earnings
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$4,700,000
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During 2017, half of the treasury stock was resold for $274,000; net income was $770,000; cash dividends declared were $1,670,000; and stock dividends declared were $670,000.
What would shareholders' equity be as of December 31, 2017?
$10,041,000.
$9,152,000.
$9,041,000.
$6,370,000.
5. Yellow Enterprises reported the following ($ in 000s) as of December 31, 2016. All accounts have normal balances.
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Deficit (debit balance in retained earnings)
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2,400
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Common stock
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3,500
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Paid-in capital-treasury stock
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2,000
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Treasury stock at cost
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250
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Paid-in capital-excess of par
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30,900
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During 2017 ($ in 000s), net income was $9,900; 25% of the treasury stock was resold for $560; cash dividends declared were $800; cash dividends paid were $460.
What ($ in 000s) was shareholders' equity as of December 31, 2017?
$43,190.
$43,410.
$43,650.
$44,410.
6. The shareholders' equity of Green Corporation includes $298,000 of $1 par common stock and $490,000 par value of 7% cumulative preferred stock. The board of directors of Green declared cash dividends of $59,000 in 2016 after paying $29,000 cash dividends in each of 2015 and 2014. What is the amount of dividends common shareholders will receive in 2016?
$14,100.
$44,900.
$24,700.
$39,600.
7. Rick Co. had 24 million shares of $2 par common stock outstanding at January 1, 2016. In October, 2016, Rick Co.'s Board of Directors declared and distributed a 2% common stock dividend when the market value of its common stock was $65 per share. In recording this transaction, Rick would:
Credit common stock for $31.20 million.
None of these answer choices correct.
Debit retained earnings for $31.20 million.
Credit paid-in capital - excess of par for $31.20 million.
8. Olsson Corporation received a check from its underwriters for $75 million. This was for the issue of one million of its $5 par stock that the underwriters expect to sell for $75 per share.
Which is the correct entry to record the issue of the stock?
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Cash
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75,000,000
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Common stock
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75,000,000
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Cash
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75,000,000
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Common stock
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5,000,000
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Paid-in capital - excess of par
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70,000,000
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Cash
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75,000,000
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Deferred stock issue revenue
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27,000,000
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Common stock
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5,000,000
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Paid-in capital - excess of par
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43,000,000
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Cash
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75,000,000
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Stock issue expense
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27,000,000
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Stock contract receivable
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48,000,000
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9. Boxer Company owned 25,000 shares of King Company that were purchased in 2014 for $390,000. On May 1, 2016, Boxer declared a property dividend of 1 share of King for every 10 shares of Boxer stock. On that date, there were 53,000 shares of Boxer stock outstanding. The market value of the King stock was $21 per share on the date of declaration and $36 per share on the date of distribution. By how much is retained earnings reduced by the property dividend?
$111,300.
$0.
$191,000.
$112,800.
10. On October 1, 2016, Chief Corporation declared and issued a 11% stock dividend. Before this date, Chief had 78,000 shares of $5 par common stock outstanding. The market value of Chief Corporation on the date of declaration was $10 per share. As a result of this dividend, Chief's retained earnings will:
Decrease by $86,800.
Not change.
Increase by $85,800.
Decrease by $85,800.