The following information is provided for the Columbus Company: $\begin{array}{ll} \text { Deferred compensation pay able-stock appreciation rights } & \$ 10 \\ \text { Bonds payable } & 120 \\ \text { Additional paid-in capital on common stock } & 20 \\ \text { Donated capital } & 16\\ \text { Treasuy stock (at cost) } & 8 \\ \text { Common stock, } \$ 1 \text { par } & 100 \\ \text { Common stock optionwarrants } & 40 \\ \text { Unrealized increase in value of available for sale securities } & 28 \\ \text { Additional paid-in capital from treasury stock } & 3 \\ \text { Retained earnings } & 57 \end{array}$ What is the total stockholders' equity of Columbus Company?

A) $212 B) $228 C) $256 D) $272 E) none of these A) $212 B) $228 C) $256 D) $272 E) none of these

How will a company's working capital and current ratio be affected by the recording of a cash dividend on the declaration date? (Assume the dividend is paid on a later date.) $\begin{array}{lll} & \text { Working Capital}& \text { Current Ratio}\\ \text { I. } & \text { decrease } & \text { decrease } \\ \text { II. } & \text { decrease } & \text { no effect } \\ \text { III. } & \text { no effect } & \text { no effect }\\ \text { III. } & \text { no effect } & \text { decrease } \end{array}$

A) I B) II C) III D) IV A) I B) II C) III D) IV

If a corporation appropriates retained earnings for treasury stock transactions, the appropriation will affect total amounts for retained earnings and stockholders' equity as $\begin{array}{lll} &\text { Total } & \text { Total } \\ &\text { Retained Earnings } & \text { Stockholders' Equity } \\ \text { I. } & \text { decrease} & \text { decrease } \\ \text { II. } & \text { decrease } & \text { no effect }\\ \text { III. } &\text { no effect }& \text { no effect} \\ \text { IV. } &\text { no effect }&\text { decrease } \end{array}$

A) I B) II C) III D) IV A) I B) II C) III D) IV

How will a company's total current liabilities and total stockholders' equity be affected by the declaration of a stock dividend? (Assume the stock dividend is distributed at a later date.) $\begin{array}{lll} &\text { Total } & \text { Total } \\ &\text { Current Liabilities } & \text { Stockholders' Equity } \\ \text { I. } & \text { increase } & \text { decrease } \\ \text { II. } & \text { increase } & \text { no effect }\\ \text { III. } &\text { no effect }& \text { decrease } \\ \text { IV. } &\text { no effect }&\text { no effect } \end{array}$

A) I B) II C) III D) IV A) I B) II C) III D) IV

Exam 17: Earnings Per Share and Retained Earnings

On January 1, 2010, Cain Co.had 20, 000 shares of common stock outstanding.On April 1, 2010 it had a 15% stock dividend.On October 1, 2011 it had a 4:1 stock split. Required:

(Essay)

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(78)

Question 61

The term deficit in financial accounting means

(Multiple Choice)

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(80)

Question 62

Going Green, Inc.had 18, 000 shares of common stock outstanding on January 1.An additional 6, 000 shares were issued on May 1.The company also had 1, 000 shares of 5.5%, $100 par, convertible preferred stock outstanding during the year.Each share is convertible into 8 shares of common stock.Net income for the year was $82, 500. Required: Compute the appropriate earnings per share amount(s)that would appear on the Going Green's income statement.

(Essay)

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Question 63

Which of the following items would be included in a basic earnings per share calculation?

(Multiple Choice)

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Question 64

On November 1, 2010, the Metal Construction Company declared a property dividend payable in the form of bonds held for long-term investment purposes.The bonds will be distributed to the common stockholders on December 15, 2010.The bonds to be distributed to the common stockholders originally cost Metal $210, 000.Fair value of the bonds on various dates is as follows: December 31,2009 \ 220,000 November 1,2010 225,000 December 15,2010 230,000 Which one of the following amounts should be used to record the appropriate credit to Property Dividends Payable?

(Multiple Choice)

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Question 65

The Stamp Company has issued 10%, partially participating, cumulative preferred stock with a total par value of $200, 000 and common stock with a total par value of $800, 000.The preferred stock participates up to 15% of its par value.No dividends are in arrears.How much cash will be paid to the preferred stockholders and the common stockholders, respectively, if cash dividends of $160, 000 are distributed?

(Multiple Choice)

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Question 66

When a company is determining its dividend policy, the company must adhere to legal requirements.The legal requirements are determined by the

(Multiple Choice)

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Question 67

Which one of the following indicators is a company prohibited from reporting?

(Multiple Choice)

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Question 68

Which statement best represents the relationship between date of declaration, date of record and ex-dividend date, and date of payment, for a cash dividend.

(Multiple Choice)

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Question 69

The board of directors of the Sound Design Corporation is trying to establish the dividends policy for 2010 for the company.The board has asked you, the vice president of finance, to attend the meeting in order to get your input.You were asked to discuss and evaluate stock dividends from the perspective of both (1)the stockholders, and (2)the issuing corporation's viewpoint. Required:

(Essay)

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Question 70

The Martin Company's stockholders' equity accounts have the following balances as of December 31, 2010: On January 2, 2011, the board of directors of Martin declared a 10% stock dividend to be distributed on February 15, 2011.The market price of Martin Company's common stock was $65 per share on January 2, 2011.On the date of declaration, the retained earnings account should be decreased by

(Multiple Choice)

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Question 71

A dividend that represents a return of capital rather than a distribution of retained earnings is called a

(Multiple Choice)

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Question 72

The following information is provided for the Columbus Company: Deferred compensation pay able-stock appreciation rights \ 10 Bonds payable 120 Additional paid-in capital on common stock 20 Donated capital 16 Treasuy stock (at cost) 8 Common stock, \ 1 par 100 Common stock optionwarrants 40 Unrealized increase in value of available for sale securities 28 Additional paid-in capital from treasury stock 3 Retained earnings 57 What is the total stockholders' equity of Columbus Company?

(Multiple Choice)

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Question 73

How will a company's working capital and current ratio be affected by the recording of a cash dividend on the declaration date? (Assume the dividend is paid on a later date.) Working Capital Current Ratio I. decrease decrease II. decrease no effect III. no effect no effect III. no effect decrease

(Multiple Choice)

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(83)

Question 74

If a corporation appropriates retained earnings for treasury stock transactions, the appropriation will affect total amounts for retained earnings and stockholders' equity as Total Total Retained Earnings Stockholders' Equity I. decrease decrease II. decrease no effect III. no effect no effect IV. no effect decrease

(Multiple Choice)

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Question 75

On January 1, a corporation had 50, 000 shares of common stock outstanding.On April 1, the company declared a 20% stock dividend, and on August 1, the company had a 3-for-1 stock split.On December 1, the company issued an additional 6, 000 shares.The denominator in the earnings per share calculation would be

(Multiple Choice)

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(90)

Question 76

During 2010, Sanchez, Inc.had the following convertible securities outstanding: Sanchez, Inc.has an income tax rate of 40%.Its reported net income for 2010 was $88, 000, and it had 22, 000 shares of common stock outstanding all year. Required: Calculate basic and diluted earnings per share for Sanchez.

(Essay)

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Question 77

Which one of the following statements concerning earnings per share amounts is true?

(Multiple Choice)

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Question 78

When a corporation has a loss from continuing operations, the basic earnings per share is

(Multiple Choice)

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Question 79

How will a company's total current liabilities and total stockholders' equity be affected by the declaration of a stock dividend? (Assume the stock dividend is distributed at a later date.) Total Total Current Liabilities Stockholders' Equity I. increase decrease II. increase no effect III. no effect decrease IV. no effect no effect

(Multiple Choice)

4.8/5

(75)

Question 80

On January 1, 2010, Cain Co.had 20, 000 shares of common stock outstanding.On April 1, 2010 it had a 15% stock dividend.On October 1, 2011 it had a 4:1 stock split. Required:

The term deficit in financial accounting means

Which of the following items would be included in a basic earnings per share calculation?

When a company is determining its dividend policy, the company must adhere to legal requirements.The legal requirements are determined by the

Which one of the following indicators is a company prohibited from reporting?

Which statement best represents the relationship between date of declaration, date of record and ex-dividend date, and date of payment, for a cash dividend.

A dividend that represents a return of capital rather than a distribution of retained earnings is called a

How will a company's working capital and current ratio be affected by the recording of a cash dividend on the declaration date? (Assume the dividend is paid on a later date.) Working Capital Current Ratio I. decrease decrease II. decrease no effect III. no effect no effect III. no effect decrease

Which one of the following statements concerning earnings per share amounts is true?

When a corporation has a loss from continuing operations, the basic earnings per share is

The Environment of Financial Reporting

Financial Reporting: Its Conceptual Framework

Review of a Companys Accounting System

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Additional Aspects of Financial Reporting and Financial Analysis

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