Questions from Accounting Principles

Q: What is the formula for computing book value per share when a

What is the formula for computing book value per share when a corporation has only outstanding common stock?

Q: Emko Inc.’s common stock has a par value of $

Emko Inc.’s common stock has a par value of $1, a book value of $24, and a current market price of $18. Explain why these amounts are all different.

Q: Jan Kimler maintains that adequate cash is the only requirement for the

Jan Kimler maintains that adequate cash is the only requirement for the declaration of a cash dividend. Is Jan correct? Explain.

Q: a. Three dates are important in connection with cash dividends.

a. Three dates are important in connection with cash dividends. Identify these dates, and explain their significance to the corporation and its stockholders. b. Identify the accounting entries that ar...

Q: Farley Inc. declares a $55,000 cash dividend on

Farley Inc. declares a $55,000 cash dividend on December 31, 2020. The required annual dividend on preferred stock is $10,000. Determine the allocation of the dividend to preferred and common stockhol...

Q: Beauty Island Corporation began operations on April 1 by issuing 60,

Beauty Island Corporation began operations on April 1 by issuing 60,000 shares of $5 par value common stock for cash at $13 per share. On April 19, it issued 2,000 shares of common stock to attorneys...

Q: Rich Mordica asks, “Since stock dividends don’t change anything,

Rich Mordica asks, “Since stock dividends don’t change anything, why declare them?” What is your answer to Rich?

Q: Gorton Corporation has 30,000 shares of $10 par value

Gorton Corporation has 30,000 shares of $10 par value common stock outstanding when it announces a 2-for-1 stock split. Before the split, the stock had a market price of $120 per share. After the spli...

Q: Nabb & Fry Co. reports net income of $31,

Nabb & Fry Co. reports net income of $31,000. Interest allowances are Nabb $7,000 and Fry $5,000, salary allowances are Nabb $15,000 and Fry $10,000, and the remainder is shared equally. Show the dist...

Q: After liquidating noncash assets and paying creditors, account balances in the

After liquidating noncash assets and paying creditors, account balances in the Mann Co. are Cash $21,000; A, Capital (Cr.) $8,000; B, Capital (Cr.) $9,000; and C, Capital (Cr.) $4,000. The partners sh...