Question 1

When stock is issued for legal services, the transaction is recorded by debiting Organization Expense for the

Accepted Answer

A)  stated value of the stock. 
B)  par value of the stock. 
C)  market value of the stock. 
D)  book value of the stock. 
A)  stated value of the stock. 
B)  par value of the stock. 
C)  market value of the stock. 
D)  book value of the stock.

Question 2

If stock is issued for less than par value, the account

Accepted Answer

A)  Paid-In Capital in Excess of Par is credited. 
B)  Paid-In Capital in Excess of Par is debited if a debit balance exists in the account. 
C)  Paid-In Capital in Excess of Par is debited if a credit balance exists in the account. 
D)  Retained Earnings is credited. 
A)  Paid-In Capital in Excess of Par is credited. 
B)  Paid-In Capital in Excess of Par is debited if a debit balance exists in the account. 
C)  Paid-In Capital in Excess of Par is debited if a credit balance exists in the account. 
D)  Retained Earnings is credited.

Question 3

Dividends are predominantly paid in

Accepted Answer

A)  earnings. 
B)  property. 
C)  cash. 
D)  stock. 
A)  earnings. 
B)  property. 
C)  cash. 
D)  stock.

Question 4

Arm, Inc., has 10,000 shares of 5%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2018. If the board of directors declares a $200,000 dividend, the

Accepted Answer

A)  preferred stockholders will receive 1/10th of what the common stockholders will receive. 
B)  preferred stockholders will receive the entire $200,000. 
C)  $50,000 will be held as restricted retained earnings and paid out at some future date. 
D)  preferred stockholders will receive $50,000 and the common stockholders will receive $150,000. 
A)  preferred stockholders will receive 1/10th of what the common stockholders will receive. 
B)  preferred stockholders will receive the entire $200,000. 
C)  $50,000 will be held as restricted retained earnings and paid out at some future date. 
D)  preferred stockholders will receive $50,000 and the common stockholders will receive $150,000.

Question 5

When preferred stock is cumulative, preferred dividends not declared in a period are

Accepted Answer

A)  considered a liability. 
B)  called dividends in arrears. 
C)  distributions of earnings. 
D)  never paid. 
A)  considered a liability. 
B)  called dividends in arrears. 
C)  distributions of earnings. 
D)  never paid.

Question 6

Which of the following statements about dividends is not accurate?

Accepted Answer

A)  Many companies declare and pay cash dividends quarterly. 
B)  Low dividends may mean high stock returns. 
C)  The board of directors is obligated to declare dividends. 
D)  A legal dividend may not be a feasible one. 
A)  Many companies declare and pay cash dividends quarterly. 
B)  Low dividends may mean high stock returns. 
C)  The board of directors is obligated to declare dividends. 
D)  A legal dividend may not be a feasible one.

Question 7

The per share amount normally assigned by the board of directors to a large stock dividend is

Accepted Answer

A)  the market value of the stock on the date of declaration. 
B)  the average price paid by stockholders on outstanding shares. 
C)  the par or stated value of the stock. 
D)  zero. 
A)  the market value of the stock on the date of declaration. 
B)  the average price paid by stockholders on outstanding shares. 
C)  the par or stated value of the stock. 
D)  zero.

Question 8

On January 1, 2018, Ralph Corporation had $2,000,000 of $10 par value common stock outstanding that was issued at par and retained earnings of $1,000,000. The company issued 200,000 shares of common stock at $12 per share on July 1. On December 15, the board of directors declared a 15% stock dividend to stockholders of record on December 31, 2018, payable on January 15, 2019. The market value of Ralph Corporation stock was $14 per share on December 15 and $16 per share on December 31. Net income for 2018 was $500,000.
Instructions
(1) Journalize the issuance of stock on July 1 and the declaration of the stock dividend on December 15.
(2) Prepare the stockholders' equity section of the balance sheet for Ralph Corporation at December 31, 2018.

Accepted Answer

The answer of On January 1, 2018, Ralph Corporation had...

Question 9

Sandoz Corporation was organized on January 1, 2018, with authorized capital of 500,000 shares of $10 par value common stock. During 2018, Sandoz issued 30,000 shares at $12 per share, purchased 3,000 shares of treasury stock at $13 per share, and sold 3,000 shares of treasury stock at $14 per share. What is the amount of additional paid-in capital at December 31, 2018?

Accepted Answer

A)  $0 
B)  $3,000 
C)  $60,000 
D)  $63,000 
A)  $0 
B)  $3,000 
C)  $60,000 
D)  $63,000

Question 10

Of the various dividends types, the two most common types in practice are

Accepted Answer

A)  cash and large stock. 
B)  cash and property. 
C)  cash and small stock. 
D)  property and small stock. 
A)  cash and large stock. 
B)  cash and property. 
C)  cash and small stock. 
D)  property and small stock.

Question 11

Cork Inc. declared a $160,000 cash dividend. It currently has 6,000 shares of 6%, $100 par value cumulative preferred stock outstanding. It is one year in arrears on its preferred stock. How much cash will Cork distribute to the common stockholders?

Accepted Answer

A)  $88,000. 
B)  $72,000. 
C)  $124,000. 
D)  None of these answers are correct. 
A)  $88,000. 
B)  $72,000. 
C)  $124,000. 
D)  None of these answers are correct.

Question 12

The balance in retained earnings on January 1, 2018, for Booker Inc., was $625,000. During the year, the corporation paid cash dividends of $70,000 and distributed a stock dividend of $25,000. Net income for 2018 was $120,000.
Instructions
Prepare the retained earnings statement for 2018.

Accepted Answer

The answer of The balance in retained earnings on January...

Question 13

Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections:

Accepted Answer

The answer of Indicate the respective effects of the declaration...

Question 14

Paid-in capital from treasury stock would appear on a balance sheet under the category

Accepted Answer

A)  capital stock. 
B)  treasury stock. 
C)  additional paid-in capital. 
D)  contra to stockholders' equity. 
A)  capital stock. 
B)  treasury stock. 
C)  additional paid-in capital. 
D)  contra to stockholders' equity.

Question 15

The dominant form of business organization in the United States in terms of dollar sales volume, earnings, and employees is

Accepted Answer

A)  the sole proprietorship. 
B)  the partnership. 
C)  the corporation. 
D)  not known. 
A)  the sole proprietorship. 
B)  the partnership. 
C)  the corporation. 
D)  not known.

Question 16

Evergreen Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000. As a result of this event,

Accepted Answer

A)  Evergreen's Common Stock account decreased $50,000. 
B)  Evergreen's total stockholders' equity decreased $115,000. 
C)  Evergreen's Paid-in Capital in Excess of Par account decreased $65,000. 
D)  All of these answers are correct. 
A)  Evergreen's Common Stock account decreased $50,000. 
B)  Evergreen's total stockholders' equity decreased $115,000. 
C)  Evergreen's Paid-in Capital in Excess of Par account decreased $65,000. 
D)  All of these answers are correct.

Question 17

If stock is issued for a noncash asset, the asset should be recorded on the books of the corporation at

Accepted Answer

A)  fair value. 
B)  cost. 
C)  zero. 
D)  a nominal amount. 
A)  fair value. 
B)  cost. 
C)  zero. 
D)  a nominal amount.

Question 18

Dividends in arrears on cumulative preferred stock

Accepted Answer

A)  are considered to be a non-current liability. 
B)  are considered to be a current liability. 
C)  only occur when preferred dividends have been declared. 
D)  should be disclosed in the notes to the financial statements. 
A)  are considered to be a non-current liability. 
B)  are considered to be a current liability. 
C)  only occur when preferred dividends have been declared. 
D)  should be disclosed in the notes to the financial statements.

Question 19

On January 1, Sway Corporation had 60,000 shares of $10 par value common stock outstanding. On March 17, the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The entry to record the transaction of March 17 would include a

Accepted Answer

A)  credit to Stock Dividends for $18,000. 
B)  credit to Cash for $78,000. 
C)  credit to Common Stock Dividends Distributable for $60,000. 
D)  debit to Common Stock Dividends Distributable for $60,000. 
A)  credit to Stock Dividends for $18,000. 
B)  credit to Cash for $78,000. 
C)  credit to Common Stock Dividends Distributable for $60,000. 
D)  debit to Common Stock Dividends Distributable for $60,000.

Question 20

Which of the following statements reflects the transferability of ownership rights in a corporation?

Accepted Answer

A)  If a stockholder decides to transfer ownership, he must transfer all of his shares. 
B)  A stockholder may dispose of part or all of his shares. 
C)  A stockholder must obtain permission from the board of directors before selling shares. 
D)  A stockholder must obtain permission from at least three other stockholders before selling shares. 
A)  If a stockholder decides to transfer ownership, he must transfer all of his shares. 
B)  A stockholder may dispose of part or all of his shares. 
C)  A stockholder must obtain permission from the board of directors before selling shares. 
D)  A stockholder must obtain permission from at least three other stockholders before selling shares.

When stock is issued for legal services, the transaction is recorded by debiting Organization Expense for the

If stock is issued for less than par value, the account

Dividends are predominantly paid in

Arm, Inc., has 10,000 shares of 5%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2018. If the board of directors declares a $200,000 dividend, the

When preferred stock is cumulative, preferred dividends not declared in a period are

Which of the following statements about dividends is not accurate?

The per share amount normally assigned by the board of directors to a large stock dividend is

Of the various dividends types, the two most common types in practice are

Cork Inc. declared a $160,000 cash dividend. It currently has 6,000 shares of 6%, $100 par value cumulative preferred stock outstanding. It is one year in arrears on its preferred stock. How much cash will Cork distribute to the common stockholders?

The balance in retained earnings on January 1, 2018, for Booker Inc., was $625,000. During the year, the corporation paid cash dividends of $70,000 and distributed a stock dividend of $25,000. Net income for 2018 was $120,000. Instructions Prepare the retained earnings statement for 2018.

Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections:

Paid-in capital from treasury stock would appear on a balance sheet under the category

The dominant form of business organization in the United States in terms of dollar sales volume, earnings, and employees is

Evergreen Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000. As a result of this event,

If stock is issued for a noncash asset, the asset should be recorded on the books of the corporation at

Dividends in arrears on cumulative preferred stock

On January 1, Sway Corporation had 60,000 shares of $10 par value common stock outstanding. On March 17, the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The entry to record the transaction of March 17 would include a

Which of the following statements reflects the transferability of ownership rights in a corporation?

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

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Exam 11: Corporations: Organization, Stock Transactions

When stock is issued for legal services, the transaction is recorded by debiting Organization Expense for the

If stock is issued for less than par value, the account

Dividends are predominantly paid in

Arm, Inc., has 10,000 shares of 5%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2018. If the board of directors declares a $200,000 dividend, the

When preferred stock is cumulative, preferred dividends not declared in a period are

Which of the following statements about dividends is not accurate?

The per share amount normally assigned by the board of directors to a large stock dividend is

Of the various dividends types, the two most common types in practice are

Cork Inc. declared a $160,000 cash dividend. It currently has 6,000 shares of 6%, $100 par value cumulative preferred stock outstanding. It is one year in arrears on its preferred stock. How much cash will Cork distribute to the common stockholders?

The balance in retained earnings on January 1, 2018, for Booker Inc., was $625,000. During the year, the corporation paid cash dividends of $70,000 and distributed a stock dividend of $25,000. Net income for 2018 was $120,000. Instructions Prepare the retained earnings statement for 2018.

Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections:

Paid-in capital from treasury stock would appear on a balance sheet under the category

The dominant form of business organization in the United States in terms of dollar sales volume, earnings, and employees is

Evergreen Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000. As a result of this event,

If stock is issued for a noncash asset, the asset should be recorded on the books of the corporation at

Dividends in arrears on cumulative preferred stock

On January 1, Sway Corporation had 60,000 shares of $10 par value common stock outstanding. On March 17, the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The entry to record the transaction of March 17 would include a

Which of the following statements reflects the transferability of ownership rights in a corporation?

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