Question 1

Reserves include each of the following except

Accepted Answer

A)  other comprehensive income items. 
B)  revaluation surplus. 
C)  share premium. 
D)  unrealized gains on available-for-sale securities. 
A)  other comprehensive income items. 
B)  revaluation surplus. 
C)  share premium. 
D)  unrealized gains on available-for-sale securities. C

Question 2

Name at least three factors that influence the market value of stock.
2. Corporations acquire treasury stock for a variety of purposes. Name three reasons why treasury stock may be acquired by a corporation.

Accepted Answer

1. Factors that influence the market value of stock:
(a) Anticipated future earnings of the company.
(b) Expected dividend rate per share.
(c) Current financial position.
(d) Current state of the economy.
(e) Current state of the securities market.
2. Reasons why a company may acquire treasury stock:
(a) To reissue the shares to officers and employees under bonus and stock compensation plans.
(b) To signal to the stock market that management believes the stock is underpriced in the hope of enhancing its market value
(c) To have additional shares available for use in the acquisition of other companies.
(d) To reduce the number of shares outstanding and thereby increase earnings per share.
(e) To rid the company of disgruntled investors perhaps to avoid a takeover.

Question 3

Match each item/event pair below with the indicated change in the item. An individual classification may be used more than once, or not at all. For each dividend, assume that both declaration and payment or distribution has occurred.
Classifications
-Item  &emsp;    &emsp; &emsp;     &emsp;    &emsp;  &emsp; &emsp;   &emsp;     Event
Total retained earnings  &ensp;        Cash dividend

Accepted Answer

A) Item increases 
B) Item decreases 
C) Item is unchanged 
D) Direction of change cannot be determined 
A) Item increases 
B) Item decreases 
C) Item is unchanged 
D) Direction of change cannot be determined B

Question 4

Return on common stockholders' equity is computed by dividing net income by ending stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 5

The declaration and distribution of a stock dividend will

Accepted Answer

A)  increase total stockholders' equity. 
B)  increase total assets. 
C)  decrease total assets. 
D)  have no effect on total assets. 
A)  increase total stockholders' equity. 
B)  increase total assets. 
C)  decrease total assets. 
D)  have no effect on total assets.

Question 6

Dividends may be declared and paid in cash or stock.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following represents the largest number of common shares?

Accepted Answer

A)  Treasury shares 
B)  Issued shares 
C)  Outstanding shares 
D)  Authorized shares 
A)  Treasury shares 
B)  Issued shares 
C)  Outstanding shares 
D)  Authorized shares

Question 8

Farmer Company reports the following amounts for 2018:   The 2018 rate of return on common stockholders' equity is

Accepted Answer

A)  30.0%. 
B)  24.0%. 
C)  27.0%. 
D)  33.8%. 
A)  30.0%. 
B)  24.0%. 
C)  27.0%. 
D)  33.8%.

Question 9

A stockholder who receives a stock dividend would

Accepted Answer

A)  expect the market price per share to increase. 
B)  own more shares of stock. 
C)  expect retained earnings to increase. 
D)  expect the par value of the stock to change. 
A)  expect the market price per share to increase. 
B)  own more shares of stock. 
C)  expect retained earnings to increase. 
D)  expect the par value of the stock to change.

Question 10

Which of the following would not be true of a privately held corporation?

Accepted Answer

A)  It is sometimes called a closely held corporation. 
B)  Its shares are regularly traded on the New York Stock Exchange. 
C)  It does not offer its shares for sale to the general public. 
D)  It is usually smaller than a publicly held company. 
A)  It is sometimes called a closely held corporation. 
B)  Its shares are regularly traded on the New York Stock Exchange. 
C)  It does not offer its shares for sale to the general public. 
D)  It is usually smaller than a publicly held company.

Question 11

King Corporation had net income of $260,000 and paid dividends of $40,000 to common stockholders and $10,000 to preferred stockholders in 2018. King Corporation's common stockholders' equity at the beginning and end of 2018 was $870,000 and $1,130,000, respectively. There are 100,000 weighted-average shares of common stock outstanding. King Corporation's return on common stockholders' equity was

Accepted Answer

A)  18.6%. 
B)  25%. 
C)  21%. 
D)  22.1%. 
A)  18.6%. 
B)  25%. 
C)  21%. 
D)  22.1%.

Question 12

Halpern Corporation is authorized to issue 1,000,000 shares of $3 par value common stock. During 2018, its first year of operation, the company has the following stock transactions.
Jan. 1 Paid the state $5,000 for incorporation fees.
Jan. 15 Issued 500,000 shares of stock at $6 per share.
Jan. 30 Attorneys for the company accepted 500 shares of common stock as payment for legal services rendered in helping the company incorporate. The legal services are estimated to have a value of $7,000.
July 2 Issued 100,000 shares of stock for land. The land had an asking price of $900,000. The stock is currently selling on a national exchange at $8 per share.
Sept. 5 Purchased 15,000 shares of common stock for the treasury at $8 per share.
Dec. 6 Sold 11,000 shares of the treasury stock at $11 per share.
Instructions
Journalize the transactions for Halpern Corporation.

Accepted Answer

The answer of Halpern Corporation is authorized to issue 1,000,000...

Question 13

When no-par value stock does not have a stated value, the entire proceeds from the issuance of the stock becomes legal capital.

Accepted Answer

A) True 
 B)False

Question 14

Lange Corporation issued 5,000 shares of stock.
Instructions
Prepare the entry for the issuance under the following assumptions.
(a) The stock had a par value of $10 per share and was issued for a total of $65,000.
(b) The stock had a stated value of $10 per share and was issued for a total of $65,000.
(c) The stock had a par value of $10 per share and was issued to attorneys for services during in-corporation valued at $65,000.
(d) The stock had a par value of $10 per share and was issued for land worth $65,000.

Accepted Answer

The answer of Lange Corporation issued 5,000 shares of stock.
Instructions
Prepare...

Question 15

Cloud Manufacturing declared a 10% stock dividend when it had 700,000 shares of $3 par value common stock outstanding. The market price per common share was $12 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to

Accepted Answer

A)  Stock Dividends for $210,000. 
B)  Paid-in Capital in Excess of Par for $630,000. 
C)  Common Stock for $210,000. 
D)  Common Stock Dividends Distributable for $840,000. 
A)  Stock Dividends for $210,000. 
B)  Paid-in Capital in Excess of Par for $630,000. 
C)  Common Stock for $210,000. 
D)  Common Stock Dividends Distributable for $840,000.

Question 16

The effect of the declaration of a cash dividend by the board of directors is to

Accepted Answer

The answer of The effect of the declaration of a...

Question 17

Which of the following statements regarding the date of a cash dividend declaration is not accurate?

Accepted Answer

A)  The dividend can be rescinded once it has been declared. 
B)  The corporation is committed to a legal, binding obligation. 
C)  The board of directors formally authorizes the cash dividend. 
D)  A liability account must be increased. 
A)  The dividend can be rescinded once it has been declared. 
B)  The corporation is committed to a legal, binding obligation. 
C)  The board of directors formally authorizes the cash dividend. 
D)  A liability account must be increased.

Question 18

Par value of stock represents the __________________ per share that must be retained in the business for the protection of corporate ___________________.

Accepted Answer

legal capi

Question 19

A corporation purchases 40,000 shares of its own $30 par common stock for $45 per share, recording it at cost. What will be the effect on total stockholders' equity?

Accepted Answer

A)  Increase by $1,800,000 
B)  Decrease by $1,200,000 
C)  Decrease by $1,800,000 
D)  Increase by $1,200,000 
A)  Increase by $1,800,000 
B)  Decrease by $1,200,000 
C)  Decrease by $1,800,000 
D)  Increase by $1,200,000

Question 20

A major difference between IFRS and GAAP relates to the

Accepted Answer

A)  Retained Earnings account. 
B)  Revaluation Surplus account. 
C)  Share Capital account. 
D)  Share Premium account. 
A)  Retained Earnings account. 
B)  Revaluation Surplus account. 
C)  Share Capital account. 
D)  Share Premium account.

Reserves include each of the following except

Name at least three factors that influence the market value of stock. 2. Corporations acquire treasury stock for a variety of purposes. Name three reasons why treasury stock may be acquired by a corporation.

Match each item/event pair below with the indicated change in the item. An individual classification may be used more than once, or not at all. For each dividend, assume that both declaration and payment or distribution has occurred. Classifications -Item Event Total retained earnings Cash dividend

Return on common stockholders' equity is computed by dividing net income by ending stockholders' equity.

The declaration and distribution of a stock dividend will

Dividends may be declared and paid in cash or stock.

Which of the following represents the largest number of common shares?

Farmer Company reports the following amounts for 2018: The 2018 rate of return on common stockholders' equity is

A stockholder who receives a stock dividend would

Which of the following would not be true of a privately held corporation?

When no-par value stock does not have a stated value, the entire proceeds from the issuance of the stock becomes legal capital.

Cloud Manufacturing declared a 10% stock dividend when it had 700,000 shares of $3 par value common stock outstanding. The market price per common share was $12 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to

The effect of the declaration of a cash dividend by the board of directors is to

Which of the following statements regarding the date of a cash dividend declaration is not accurate?

Par value of stock represents the per share that must be retained in the business for the protection of corporate _.

A corporation purchases 40,000 shares of its own $30 par common stock for $45 per share, recording it at cost. What will be the effect on total stockholders' equity?

A major difference between IFRS and GAAP relates to the

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters

Exam 11: Corporations: Organization, Stock Transactions

Reserves include each of the following except

Name at least three factors that influence the market value of stock. 2. Corporations acquire treasury stock for a variety of purposes. Name three reasons why treasury stock may be acquired by a corporation.

Match each item/event pair below with the indicated change in the item. An individual classification may be used more than once, or not at all. For each dividend, assume that both declaration and payment or distribution has occurred. Classifications -Item Event Total retained earnings Cash dividend

Return on common stockholders' equity is computed by dividing net income by ending stockholders' equity.

The declaration and distribution of a stock dividend will

Dividends may be declared and paid in cash or stock.

Which of the following represents the largest number of common shares?

Farmer Company reports the following amounts for 2018: The 2018 rate of return on common stockholders' equity is

A stockholder who receives a stock dividend would

Which of the following would not be true of a privately held corporation?

When no-par value stock does not have a stated value, the entire proceeds from the issuance of the stock becomes legal capital.

Cloud Manufacturing declared a 10% stock dividend when it had 700,000 shares of $3 par value common stock outstanding. The market price per common share was $12 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to

The effect of the declaration of a cash dividend by the board of directors is to

Which of the following statements regarding the date of a cash dividend declaration is not accurate?

Par value of stock represents the __________________ per share that must be retained in the business for the protection of corporate ___________________.

A corporation purchases 40,000 shares of its own $30 par common stock for $45 per share, recording it at cost. What will be the effect on total stockholders' equity?

A major difference between IFRS and GAAP relates to the

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters

Par value of stock represents the per share that must be retained in the business for the protection of corporate _.