Indicate whether each of the following actions is related to (a)managing under the corporate form of business, (b) using equity financing (c) determining dividend policies, (d) evaluating performance using return on equity, or (e) issuing stock options
1. Considering whether to make a distribution to stockholders
2. Controlling day to day operations
3. Determining whether to issue preferred or common stock
4. Compensating management based on the company's meeting or exceeding the targeted return on equity
5. Compensating employees by giving them the right to purchase shares at a given price
6. Transferring shares without the approval of other owners
SE2 Advantages and Disadvantages of a Corporation
Identify whether each of the following characteristics is an advantage or a disadvantage of the corporate form of business:
1. Ease of transfer of ownership
2. Taxation
3. Separate legal entity
4. Lack of mutual agency
5. Government regulation
6. Continuous existence
E4 Stockholders Equity
THe following accounts and balances are from the records of Guard corporation on December 31, 20xx:
Balance
Preferred Stock, $100 par value, 9 percent cumulative,
10,000 shares authorized, 6,000 shares issued and 10,000 shares authorized, 6,000 shares issued and
outstanding. $600,000 $600,000
Common Stock, $12 par value, $45,000 shares authorized,
30,000 shares 30,000 shares issue, and 28,500 shares
outstanding 360,000 360,000
Additional Paid-in Capital 194,000 194,000
Retained Earnings 23,000 23,000
Treasury, common (1,500 shares, at cost) 30,000 30,000
Prepare the stockholders' equity for Guard Corporation's balance sheet as of December 31, 20xx.
E9 Cash Dividends with Dividends in Arrears
Canterbury Corporation has 20,000 shares of its $100 par value, 7 percent cumulative preferred stock outstanding, and 100,000 shares of its $1 par value common stock outstanding. In Canterbury's first four years of operations, its board of directors paid cash dividends as follows: 20x6, none; 20x7, $240,000; 20x8, $280,000; 20x9, $280,000. Determine the dividends per share and total cash dividends paid to the preferred and common stockholders during each of the four years.
