Multiple choice questions based on stock valuation.
1. Carter Corporation had net income of $250,000 and paid dividends of $50,000 to common stockholders and $20,000 to preferred stockholders in 2008. Carter Corporation's common stockholders' equity at the beginning and end of 2008 was $870,000 and $1,130,000, respectively. There are 100,000 weighted-average shares of common stock outstanding.
Carter Corporation's earnings per share for 2008 was
a. $2.50.
b. $2.30.
c. $2.00.
d. $1.80.
2. Kim, Inc. issued 5,000 shares of stock at a stated value of $10/share. The total issue of stock sold for $15/share. The journal entry to record this transaction would include a
a. debit to Cash for $50,000.
b. credit to Common Stock for $50,000.
c. credit to Paid-in Capital in Excess of Par Value for $25,000.
d. credit to Common Stock for $75,000.