Question 1

If a corporation is authorized to issue 1,000 shares of $5 common stock,it is said to have $5,000 of stock outstanding.

Accepted Answer

A) True 
 B)False

Question 2

Organization expenses of a corporation often include legal fees and promoter fees.

Accepted Answer

A) True 
 B)False

Question 3

A company paid $0.48 in cash dividends per share.Its earnings per share is $3.20 and its market price per share is $20.00.Its dividend yield equals:

Accepted Answer

A) 2.4%. 
B) 6.25%. 
C) 6.4%. 
D) 6.67%. 
E) 15.00%. 
A) 2.4%. 
B) 6.25%. 
C) 6.4%. 
D) 6.67%. 
E) 15.00%.

Question 4

A company has 50,000 shares of common stock outstanding.The stockholders' equity applicable to common shares is $1,470,000,and the par value per common share is $5.The book value per share is:

Accepted Answer

A) $4.75. 
B) $14.70. 
C) $10.00. 
D) $29.40. 
E) $47.50. 
A) $4.75. 
B) $14.70. 
C) $10.00. 
D) $29.40. 
E) $47.50.

Question 5

The dividend yield is computed by dividing:

Accepted Answer

A) Annual cash dividends per share by earnings per share. 
B) Earnings per share by cash dividends per share. 
C) Annual cash dividends per share by the market value per share. 
D) Market price per share by cash dividends per share. 
E) Cash dividends per share by retained earnings. 
A) Annual cash dividends per share by earnings per share. 
B) Earnings per share by cash dividends per share. 
C) Annual cash dividends per share by the market value per share. 
D) Market price per share by cash dividends per share. 
E) Cash dividends per share by retained earnings.

Question 6

Hutter Corporation declared a $0.50 per share cash dividend on its common shares.The company has 20,000 shares authorized,9,000 shares issued,and 8,000 shares of common stock outstanding.The journal entry to record the dividend payment is:

Accepted Answer

A) Debit Retained Earnings $4,000;credit Common Dividends Payable $4,000. 
B) Debit Common Dividends Payable $4,000;credit Cash $4,000. 
C) Debit Retained Earnings $4,500;credit Common Dividends Payable $4,500. 
D) Debit Common Dividends Payable $4,500;credit Cash $4,500. 
E) Debit Retained Earnings $10,000;credit Common Dividends Payable $10,000. 
A) Debit Retained Earnings $4,000;credit Common Dividends Payable $4,000. 
B) Debit Common Dividends Payable $4,000;credit Cash $4,000. 
C) Debit Retained Earnings $4,500;credit Common Dividends Payable $4,500. 
D) Debit Common Dividends Payable $4,500;credit Cash $4,500. 
E) Debit Retained Earnings $10,000;credit Common Dividends Payable $10,000.

Question 7

A company's board of directors votes to declare a cash dividend of $.75 per share of common stock.The company has 15,000 shares authorized,10,000 issued,and 9,500 shares outstanding.The total amount of the cash dividend is:

Accepted Answer

A) $10,250. 
B) $14,625. 
C) $7,125. 
D) $7,500. 
E) $11,250. 
A) $10,250. 
B) $14,625. 
C) $7,125. 
D) $7,500. 
E) $11,250.

Question 8

The following data has been collected about Keller Company's stockholders' equity accounts:   Assuming the treasury shares were all purchased at the same price,the cost per share of the treasury stock is:

Accepted Answer

A) $1.15. 
B) $1.28. 
C) $11.50. 
D) $10.50. 
E) $10.00. 
A) $1.15. 
B) $1.28. 
C) $11.50. 
D) $10.50. 
E) $10.00.

Question 9

Fargo Company's outstanding stock consists of 400 shares of noncumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value.During the first three years of operation,the corporation declared and paid the following total cash dividends.   The amount of dividends paid to preferred and common shareholders in 2015 is:

Accepted Answer

A) $200 preferred;$19,800 common. 
B) $4,000 preferred;$16,000 common. 
C) $17,000 preferred;$3,000 common. 
D) $10,000 preferred;$10,000 common. 
E) $20,000 preferred;$0 common. 
A) $200 preferred;$19,800 common. 
B) $4,000 preferred;$16,000 common. 
C) $17,000 preferred;$3,000 common. 
D) $10,000 preferred;$10,000 common. 
E) $20,000 preferred;$0 common.

Question 10

Participating preferred stock has a feature that allows its holders to share with common shareholders in any dividends paid in excess of the percent or dollar amount stated on the preferred stock.

Accepted Answer

A) True 
 B)False

Question 11

Parlay Corporation has 2,000,000 shares of $0.50 par value common stock outstanding.The following selected transactions related to the company's stock took place during the current year:   Prepare necessary journal entries to record the events of April 15,May 1 and May 10.

Accepted Answer

The answer of Parlay Corporation has 2,000,000 shares of $0.50...

Question 12

A common statutory restriction is reported on the income statement whereas;a common contractual restriction is reported in the stockholders' equity section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 13

_______________________ is the stockholders' equity applicable to common shares divided by the number of common shares outstanding.

Accepted Answer

Book value

Question 14

A corporation received its charter and began business this year.The company is authorized to issue 500,000 shares of $100 par,6%,noncumulative,nonparticipating preferred stock,and 1,000,000 shares of no-par common stock.The following selected transactions occurred during this year:   Prepare journal entries to record these transactions.

Accepted Answer

The answer of A corporation received its charter and began...

Question 15

Corporations may buy back their own stock for any of the following reasons except to:

Accepted Answer

A) Avoid a hostile take-over. 
B) Have shares available for a merger or acquisition. 
C) Have shares available for employee compensation. 
D) Maintain market value for the company stock. 
E) Allow management to assume the voting rights. 
A) Avoid a hostile take-over. 
B) Have shares available for a merger or acquisition. 
C) Have shares available for employee compensation. 
D) Maintain market value for the company stock. 
E) Allow management to assume the voting rights.

Question 16

Stock not assigned a value per share by the corporate charter,allowing it to be issued at any price without the possibility of a minimum legal capital deficiency,is called _________________.

Accepted Answer

The answer of Stock not assigned a value per share...

Question 17

Prior period adjustments to financial statements can result from:

Accepted Answer

A) Changes in accounting estimates. 
B) Unacceptable accounting practices. 
C) Discontinued operations. 
D) Changes in tax law. 
E) Extraordinary items. 
A) Changes in accounting estimates. 
B) Unacceptable accounting practices. 
C) Discontinued operations. 
D) Changes in tax law. 
E) Extraordinary items.

Question 18

The main limitation in using book value per share for stock valuation models is the potential difference between recorded value and market value for both assets and liabilities.

Accepted Answer

A) True 
 B)False

Question 19

The total number of shares outstanding is the authorized stock.

Accepted Answer

A) True 
 B)False

Question 20

Stockholders' equity consists of paid-in capital and retained earnings.

Accepted Answer

A) True 
 B)False

Exam 13: Accounting for Corporations

If a corporation is authorized to issue 1,000 shares of $5 common stock,it is said to have $5,000 of stock outstanding.

Organization expenses of a corporation often include legal fees and promoter fees.

A company paid $0.48 in cash dividends per share.Its earnings per share is $3.20 and its market price per share is $20.00.Its dividend yield equals:

A company has 50,000 shares of common stock outstanding.The stockholders' equity applicable to common shares is $1,470,000,and the par value per common share is $5.The book value per share is:

The dividend yield is computed by dividing:

Hutter Corporation declared a $0.50 per share cash dividend on its common shares.The company has 20,000 shares authorized,9,000 shares issued,and 8,000 shares of common stock outstanding.The journal entry to record the dividend payment is:

A company's board of directors votes to declare a cash dividend of $.75 per share of common stock.The company has 15,000 shares authorized,10,000 issued,and 9,500 shares outstanding.The total amount of the cash dividend is:

The following data has been collected about Keller Company's stockholders' equity accounts: Assuming the treasury shares were all purchased at the same price,the cost per share of the treasury stock is:

Participating preferred stock has a feature that allows its holders to share with common shareholders in any dividends paid in excess of the percent or dollar amount stated on the preferred stock.

Parlay Corporation has 2,000,000 shares of $0.50 par value common stock outstanding.The following selected transactions related to the company's stock took place during the current year: Prepare necessary journal entries to record the events of April 15,May 1 and May 10.

A common statutory restriction is reported on the income statement whereas;a common contractual restriction is reported in the stockholders' equity section of the balance sheet.

_______________________ is the stockholders' equity applicable to common shares divided by the number of common shares outstanding.

Corporations may buy back their own stock for any of the following reasons except to:

Stock not assigned a value per share by the corporate charter,allowing it to be issued at any price without the possibility of a minimum legal capital deficiency,is called _________________.

Prior period adjustments to financial statements can result from:

The main limitation in using book value per share for stock valuation models is the potential difference between recorded value and market value for both assets and liabilities.

The total number of shares outstanding is the authorized stock.

Stockholders' equity consists of paid-in capital and retained earnings.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

Filters