Question 1

Dividends in arrears on cumulative preferred shares must be paid at the end of the accounting period if cash and retained earnings are available.

Accepted Answer

A) True 
 B)False  False

Question 2

Under ASPE, when shares are issued for non-cash consideration, a private company will value the transaction at the fair value of the shares given up, if this value is available.

Accepted Answer

A) True 
 B)False  False

Question 3

The par value of a company's shares (where allowed)may not be distributed as a dividend without the consent of the board of directors, while contributed capital may be.

Accepted Answer

A) True 
 B)False  False

Question 4

The shareholders of a corporation usually cannot be held legally liable for the debts of the corporation except to the extent that legal capital is impaired.

Accepted Answer

A) True 
 B)False

Question 5

"Common shares subscribed" is credited in recording a common share subscription contract because the shares are usually issued at the time the contract is signed.

Accepted Answer

A) True 
 B)False

Question 6

SXC reported income during four successive years as follows: $1,000, $2,000, $3,000, and $11,000.The share capital outstanding consisted of 3,000 common shares issued at $20 each, and 5,000, $.50 preferred shares issued at $10 each.(Matching common dividend, if applicable, $1).If income in full were declared as dividends each year, determine the amount that would be paid on each class of shares for each of the four years assuming:   (d)Preferred is cumulative and 1 $ ____ $ ____

Accepted Answer

Annual preferred div

Question 7

An appropriation of retained earnings of a significant amount:

Accepted Answer

A) Should be reversed when the purpose of the appropriation has been achieved. 
B) Means that specific assets actually have been set aside for a specific purpose. 
C) Can be used to absorb extraordinary losses directly one of a significant amount. 
D) provides protection to the stockholders rather than to the creditors. 
E) Can have a significant impact on the total amount of retained earnings when recorded. 
A) Should be reversed when the purpose of the appropriation has been achieved. 
B) Means that specific assets actually have been set aside for a specific purpose. 
C) Can be used to absorb extraordinary losses directly one of a significant amount. 
D) provides protection to the stockholders rather than to the creditors. 
E) Can have a significant impact on the total amount of retained earnings when recorded.

Question 8

If a company desires to pay a cash dividend, but does not want to increase its liabilities, it can:

Accepted Answer

A) pay the dividend only out of retained earnings. 
B) pay the dividend on declaration date. 
C) issue a scrip dividend. 
D) pay the dividend on the ex-dividend date. 
A) pay the dividend only out of retained earnings. 
B) pay the dividend on declaration date. 
C) issue a scrip dividend. 
D) pay the dividend on the ex-dividend date.

Question 9

The accounting treatment for ordinary and liquidating dividends differs.Ordinary dividends cause a debit to retained earnings and liquidating dividends cause a debit to contributed capital.

Accepted Answer

A) True 
 B)False

Question 10

When a corporation issues a dividend in excess of the balance of its retained earnings account, it is issuing a:

Accepted Answer

A) Property dividend. 
B) Liquidating dividend. 
C) Stock dividend. 
D) Scrip dividend. 
A) Property dividend. 
B) Liquidating dividend. 
C) Stock dividend. 
D) Scrip dividend.

Question 11

The purchase of treasury stock reduces the number of outstanding shares, and if the treasury stock is subsequently resold, it is again classified as outstanding.

Accepted Answer

A) True 
 B)False

Question 12

XAC received a share subscription from J.Doe for 100 of its common shares, issue price $15; one-third cash down payment.Provide the entry to record the subscription and partial payment.

Accepted Answer

Please see

Question 13

The effect of a stock dividend is to reduce:

Accepted Answer

A) retained earnings and the par value of each share. 
B) total stockholders' equity. 
C) retained earnings and increase legal capital. 
D) total assets and reduce total stockholders' equity. 
A) retained earnings and the par value of each share. 
B) total stockholders' equity. 
C) retained earnings and increase legal capital. 
D) total assets and reduce total stockholders' equity.

Question 14

A dividend that constitutes a return of contributed capital rather than earnings is called a:

Accepted Answer

A) Liability dividend. 
B) Property dividend. 
C) Liquidating dividend. 
D) Capital dividend. 
A) Liability dividend. 
B) Property dividend. 
C) Liquidating dividend. 
D) Capital dividend.

Question 15

DXC has the following outstanding shares:
$5 Preferred, 2,000 shares issued at $100 per share common, no-par value, 5,000 shares issued at $6 per share
(Matching dividend, if applicable $3)
Compute the amount of dividends per share payable to each class of shares for each independent cas Show computations.

Accepted Answer

Please see

Question 16

YTC issued 200 of its preferred shares and 1,000 of its common shares, for a total cash consideration of $15,000.The current market prices for its shares were: Preferred, $25; Common,
$20.The issue entry for the preferred and common shares combined would be as follows:

Accepted Answer

The total consideration paid e

Question 17

The primary sources of owners' equity must be separately identified in the accounts.

Accepted Answer

A) True 
 B)False

Question 18

LS issued 200 common shares to BH (last share transaction was a year prior when LS sold 10 shares at $4 per share), and received a patent in full payment.The patent had a current market value of $2,000 and was carried on the books of BH at $1,500.Under ASPE, common shares should be credited for:

Accepted Answer

A) $1,800 
B) $2,000 
C) $800 
D) $1,500 
E) This transaction has no commercial substance, therefore no entry is required. 
A) $1,800 
B) $2,000 
C) $800 
D) $1,500 
E) This transaction has no commercial substance, therefore no entry is required.

Question 19

Which of the following statements is correct?

Accepted Answer

A) Par value shares are prohibited under the CBCA. 
B) Contributed Capital represents the proceeds from a share issue in jurisdictions where par values are allowed. 
C) Legal capital is that which would be distributed back to shareholders in the event of liquidation. 
D) Contributed Capital is the amount on which dividend payments should be based. 
A) Par value shares are prohibited under the CBCA. 
B) Contributed Capital represents the proceeds from a share issue in jurisdictions where par values are allowed. 
C) Legal capital is that which would be distributed back to shareholders in the event of liquidation. 
D) Contributed Capital is the amount on which dividend payments should be based.

Question 20

For dividends, the date of record is the date:

Accepted Answer

A) The dividend is actually paid. 
B) The market price of the shares drops due to the dividend. 
C) The dividend is announced. 
D) On which the list of shareholders is prepared. 
A) The dividend is actually paid. 
B) The market price of the shares drops due to the dividend. 
C) The dividend is announced. 
D) On which the list of shareholders is prepared.

Dividends in arrears on cumulative preferred shares must be paid at the end of the accounting period if cash and retained earnings are available.

Under ASPE, when shares are issued for non-cash consideration, a private company will value the transaction at the fair value of the shares given up, if this value is available.

The par value of a company's shares (where allowed)may not be distributed as a dividend without the consent of the board of directors, while contributed capital may be.

The shareholders of a corporation usually cannot be held legally liable for the debts of the corporation except to the extent that legal capital is impaired.

"Common shares subscribed" is credited in recording a common share subscription contract because the shares are usually issued at the time the contract is signed.

An appropriation of retained earnings of a significant amount:

If a company desires to pay a cash dividend, but does not want to increase its liabilities, it can:

The accounting treatment for ordinary and liquidating dividends differs.Ordinary dividends cause a debit to retained earnings and liquidating dividends cause a debit to contributed capital.

When a corporation issues a dividend in excess of the balance of its retained earnings account, it is issuing a:

The purchase of treasury stock reduces the number of outstanding shares, and if the treasury stock is subsequently resold, it is again classified as outstanding.

XAC received a share subscription from J.Doe for 100 of its common shares, issue price $15; one-third cash down payment.Provide the entry to record the subscription and partial payment.

The effect of a stock dividend is to reduce:

A dividend that constitutes a return of contributed capital rather than earnings is called a:

YTC issued 200 of its preferred shares and 1,000 of its common shares, for a total cash consideration of $15,000.The current market prices for its shares were: Preferred, $25; Common, $20.The issue entry for the preferred and common shares combined would be as follows:

The primary sources of owners' equity must be separately identified in the accounts.

LS issued 200 common shares to BH (last share transaction was a year prior when LS sold 10 shares at $4 per share), and received a patent in full payment.The patent had a current market value of $2,000 and was carried on the books of BH at $1,500.Under ASPE, common shares should be credited for:

Which of the following statements is correct?

For dividends, the date of record is the date:

Financial Liabilities and Provisions

Financial Instruments: Long-Term Debt

Financial Instruments: Complex Debt and Equity

Corporate Income Tax

Tax Losses

Leases

Post-Employment Benefits

Earnings Per Share

Accounting Changes

Financial Statement Analysis

Filters

Exam 14: Shareholders Equity

Dividends in arrears on cumulative preferred shares must be paid at the end of the accounting period if cash and retained earnings are available.

Under ASPE, when shares are issued for non-cash consideration, a private company will value the transaction at the fair value of the shares given up, if this value is available.

The par value of a company's shares (where allowed)may not be distributed as a dividend without the consent of the board of directors, while contributed capital may be.

The shareholders of a corporation usually cannot be held legally liable for the debts of the corporation except to the extent that legal capital is impaired.

"Common shares subscribed" is credited in recording a common share subscription contract because the shares are usually issued at the time the contract is signed.

An appropriation of retained earnings of a significant amount:

If a company desires to pay a cash dividend, but does not want to increase its liabilities, it can:

The accounting treatment for ordinary and liquidating dividends differs.Ordinary dividends cause a debit to retained earnings and liquidating dividends cause a debit to contributed capital.

When a corporation issues a dividend in excess of the balance of its retained earnings account, it is issuing a:

The purchase of treasury stock reduces the number of outstanding shares, and if the treasury stock is subsequently resold, it is again classified as outstanding.

XAC received a share subscription from J.Doe for 100 of its common shares, issue price $15; one-third cash down payment.Provide the entry to record the subscription and partial payment.

The effect of a stock dividend is to reduce:

A dividend that constitutes a return of contributed capital rather than earnings is called a:

YTC issued 200 of its preferred shares and 1,000 of its common shares, for a total cash consideration of $15,000.The current market prices for its shares were: Preferred, $25; Common, $20.The issue entry for the preferred and common shares combined would be as follows:

The primary sources of owners' equity must be separately identified in the accounts.

LS issued 200 common shares to BH (last share transaction was a year prior when LS sold 10 shares at $4 per share), and received a patent in full payment.The patent had a current market value of $2,000 and was carried on the books of BH at $1,500.Under ASPE, common shares should be credited for:

Which of the following statements is correct?

For dividends, the date of record is the date:

Financial Liabilities and Provisions

Financial Instruments: Long-Term Debt

Financial Instruments: Complex Debt and Equity

Corporate Income Tax

Tax Losses

Leases

Post-Employment Benefits

Earnings Per Share

Accounting Changes

Financial Statement Analysis

Filters