Question 1

A company would repurchase its own stock for all of the following reasons except

Accepted Answer

A)  it needs the stock for employee bonuses. 
B)  it wishes to make an investment in its own stock. 
C)  it wishes to prevent unwanted takeover attempts. 
D)  it wishes to improve the company's financial ratios. 
A)  it needs the stock for employee bonuses. 
B)  it wishes to make an investment in its own stock. 
C)  it wishes to prevent unwanted takeover attempts. 
D)  it wishes to improve the company's financial ratios.

Question 2

Poole Company began business on January 1, 2015. The corporate charter authorized issuance of 5,000 shares of $1 par value common stock, and 4,000 shares of $8 par value, 6% cumulative preferred stock. None of the preferred shares were issued. On July 1, Poole issued 1,000 shares of common stock in exchange for two years rent on a retail location. The cash rental price is $2,400 per month and the rental period begins on July 1. The correct entry to record the July 1 transaction will

Accepted Answer

A)  Increase Cash, $57,600; Decrease Prepaid Rent, $57,600 
B)  Increase Prepaid Rent, $57,600; Increase Common Stock, $57,600 
C)  Increase Prepaid Rent, $57,600; Increase Common Stock, $1,000; Increase Additional Paid-in Capital-- Common, $56,600 
D)  Increase Prepaid Rent, $57,600; Increase Common Stock, $5,000; Increase Additional Paid-in Capital-- Common, $52,600 
A)  Increase Cash, $57,600; Decrease Prepaid Rent, $57,600 
B)  Increase Prepaid Rent, $57,600; Increase Common Stock, $57,600 
C)  Increase Prepaid Rent, $57,600; Increase Common Stock, $1,000; Increase Additional Paid-in Capital-- Common, $56,600 
D)  Increase Prepaid Rent, $57,600; Increase Common Stock, $5,000; Increase Additional Paid-in Capital-- Common, $52,600

Question 3

What is substance over form and how does this concept relate to the presentation of preferred stock?

Accepted Answer

Substance over form means that a company

Question 4

When a company purchases treasury stock, which of the following statements is true?

Accepted Answer

A)  Treasury stock is considered to be an asset because cash is paid for the stock. 
B)  The cost of the treasury stock reduces stockholders' equity. 
C)  Dividends continue to be paid on the treasury stock because it is still issued. 
D)  Since treasury stock is held by the original issuer, it is no longer considered to be issued. 
A)  Treasury stock is considered to be an asset because cash is paid for the stock. 
B)  The cost of the treasury stock reduces stockholders' equity. 
C)  Dividends continue to be paid on the treasury stock because it is still issued. 
D)  Since treasury stock is held by the original issuer, it is no longer considered to be issued.

Question 5

The Stockholders' Equity section of the balance sheet of Sea Turtle Company reveals the following information:   There have been two issues of stock since the corporation began business. The average issue price per share of stock was

Accepted Answer

A)  $3.00. 
B)  $17.00. 
C)  $20.00. 
D)  Not enough information to determine. 
A)  $3.00. 
B)  $17.00. 
C)  $20.00. 
D)  Not enough information to determine.

Question 6

Select the letter of the term each statement best describes.
-When the stock of a corporation is repurchased with no intention to reissue at a later date.

Accepted Answer

A) authorized shares 
B) issued shares 
C) outstanding shares 
D) par value 
E) additional paid-in capital
F)retained earnings
G)cumulative feature
H)participating feature
I)callable stock
J)treasury stock
K)retirement of stock
L)dividend payout ratio
M)stock dividend
N)stock split
O)market value per share
P)convertible stock
Q)book value per share 
A) authorized shares 
B) issued shares 
C) outstanding shares 
D) par value 
E) additional paid-in capital
F)retained earnings
G)cumulative feature
H)participating feature
I)callable stock
J)treasury stock
K)retirement of stock
L)dividend payout ratio
M)stock dividend
N)stock split
O)market value per share
P)convertible stock
Q)book value per share

Question 7

The stockholders' equity section of Augusta, Inc. is as follows:
   The market price of the stock on December 31, 2015, was $8 per share. Answer the following independent questions:
A Calculate the average amount at which each share of common stock was initially sold.
B What balance will be in the retained earnings account immediately after the declaration of a 2- for-1 stock split?
C If a cash dividend of $1 per share was declared to both common and preferred stockholders, what would be the balance in retained earnings immediately after the declaration?
D What balance will be in the retained earnings account immediately after the declaration of a 20% common stock dividend on December 31, 2015?

Accepted Answer

The answer of The stockholders' equity section of Augusta, Inc....

Question 8

Winslow Corporation reported the following in the stockholders' equity section of its balance sheet at December 31, 2015:

Accepted Answer

The answer of Winslow Corporation reported the following in the...

Question 9

The statement of stockholders' equity for Jutras Corporation shows an increase in the Common Stock account of $8,000, an increase in Additional Paid-in Capital--Common in the amount of $22,000, and an increase in Retained Earnings of $50,000. If the stock has a par value of $3 and dividends of $10,000 were declared and paid during the year, what is the amount of net income for the year?

Accepted Answer

A)  $40,000 
B)  $50,000 
C)  $60,000 
D)  $90,000 
A)  $40,000 
B)  $50,000 
C)  $60,000 
D)  $90,000

Question 10

Port, Inc. paid a cash dividend on January 2 that had been declared prior to the end of its fiscal year. This transaction to pay the dividend will

Accepted Answer

A)  increase Cash and increase Cash Dividend Payable. 
B)  decrease Cash Dividend Payable and decrease Cash. 
C)  decrease Retained Earnings and increase Cash Dividend Payable. 
D)  decrease Cash Dividend Payable and increase Retained Earnings. 
A)  increase Cash and increase Cash Dividend Payable. 
B)  decrease Cash Dividend Payable and decrease Cash. 
C)  decrease Retained Earnings and increase Cash Dividend Payable. 
D)  decrease Cash Dividend Payable and increase Retained Earnings.

Question 11

Name two different examples of items that can be received in addition to cash in exchange for issuing stock.
Describe how the value of each item affects additional paid-in capital.

Accepted Answer

Some examples are land, a machine, equip

Question 12

Select the letter of the term each statement best describes.
-The amount received for the issuance of stock in excess of the par value of the stock.

Accepted Answer

A) authorized shares 
B) issued shares 
C) outstanding shares 
D) par value 
E) additional paid-in capital
F)retained earnings
G)cumulative feature
H)participating feature
I)callable stock
J)treasury stock
K)retirement of stock
L)dividend payout ratio
M)stock dividend
N)stock split
O)market value per share
P)convertible stock
Q)book value per share 
A) authorized shares 
B) issued shares 
C) outstanding shares 
D) par value 
E) additional paid-in capital
F)retained earnings
G)cumulative feature
H)participating feature
I)callable stock
J)treasury stock
K)retirement of stock
L)dividend payout ratio
M)stock dividend
N)stock split
O)market value per share
P)convertible stock
Q)book value per share

Question 13

Select the letter of the term each statement best describes.
-Creation of additional shares of stock with a concurrent reduction of the par value of the stock.

Accepted Answer

A) authorized shares 
B) issued shares 
C) outstanding shares 
D) par value 
E) additional paid-in capital
F)retained earnings
G)cumulative feature
H)participating feature
I)callable stock
J)treasury stock
K)retirement of stock
L)dividend payout ratio
M)stock dividend
N)stock split
O)market value per share
P)convertible stock
Q)book value per share 
A) authorized shares 
B) issued shares 
C) outstanding shares 
D) par value 
E) additional paid-in capital
F)retained earnings
G)cumulative feature
H)participating feature
I)callable stock
J)treasury stock
K)retirement of stock
L)dividend payout ratio
M)stock dividend
N)stock split
O)market value per share
P)convertible stock
Q)book value per share

Question 14

Which of the following is false regarding the issue of stock versus the issue of bonds to raise capital?

Accepted Answer

A)  The issuance of stock decreases several important financial ratios. 
B)  Issuing bonds dilutes the voting power of the stockholders. 
C)  Corporations are not required to return the investment to the stockholders. 
D)  Investors expect to earn a higher rate of return on stocks than bonds. 
A)  The issuance of stock decreases several important financial ratios. 
B)  Issuing bonds dilutes the voting power of the stockholders. 
C)  Corporations are not required to return the investment to the stockholders. 
D)  Investors expect to earn a higher rate of return on stocks than bonds.

Question 15

Which of the following is true?

Accepted Answer

A)  The sale of stock to stockholders is an investing activity. 
B)  The repurchase of stock from stockholders is an investing activity. 
C)  The declaration of stock dividends is a financing activity. 
D)  The payment of cash dividends is a financing activity. 
A)  The sale of stock to stockholders is an investing activity. 
B)  The repurchase of stock from stockholders is an investing activity. 
C)  The declaration of stock dividends is a financing activity. 
D)  The payment of cash dividends is a financing activity.

Question 16

Many firms operate at a dividend payout ratio of less than 50%. Why don't firms pay a larger percentage of
income as dividends?

Accepted Answer

Firms do not pay out all of their income

Question 17

Explain the differences between a partnership and sole proprietorship. Include in your discussion whether either is considered a separate legal entity.

Accepted Answer

A partnership is a company own

Question 18

Stock dividends involve the issuance of additional shares of stock.

Accepted Answer

A) True 
 B)False

Question 19

Assume that on December 31, 2016, Potaw Company has outstanding 8,000 shares of $15 par, 6% noncumulative, preferred stock and 40,000 shares of $5 par common stock. Potaw was unable to declare a dividend in 2014 or 2015 but wants to declare a $75,000 dividend for 2016.
REQUIRED:
1. How much total cash is distributed to preferred stockholders?
2. How much total cash is distributed to common stockholders?
3. What is the dividend per share to preferred stock?
4. What is the dividend per share to common stock?

Accepted Answer

1. 8,000 shares × $15 par × 6%

Question 20

All changes in all stockholders' equity accounts must be shown in the Stockholders' Equity section of the balance sheet.

Accepted Answer

A) True 
 B)False

A company would repurchase its own stock for all of the following reasons except

What is substance over form and how does this concept relate to the presentation of preferred stock?

When a company purchases treasury stock, which of the following statements is true?

The Stockholders' Equity section of the balance sheet of Sea Turtle Company reveals the following information: There have been two issues of stock since the corporation began business. The average issue price per share of stock was

Select the letter of the term each statement best describes. -When the stock of a corporation is repurchased with no intention to reissue at a later date.

Winslow Corporation reported the following in the stockholders' equity section of its balance sheet at December 31, 2015:

Port, Inc. paid a cash dividend on January 2 that had been declared prior to the end of its fiscal year. This transaction to pay the dividend will

Name two different examples of items that can be received in addition to cash in exchange for issuing stock. Describe how the value of each item affects additional paid-in capital.

Select the letter of the term each statement best describes. -The amount received for the issuance of stock in excess of the par value of the stock.

Select the letter of the term each statement best describes. -Creation of additional shares of stock with a concurrent reduction of the par value of the stock.

Which of the following is false regarding the issue of stock versus the issue of bonds to raise capital?

Which of the following is true?

Many firms operate at a dividend payout ratio of less than 50%. Why don't firms pay a larger percentage of income as dividends?

Explain the differences between a partnership and sole proprietorship. Include in your discussion whether either is considered a separate legal entity.

Stock dividends involve the issuance of additional shares of stock.

All changes in all stockholders' equity accounts must be shown in the Stockholders' Equity section of the balance sheet.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

International-Financial-Reporting-Standards

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Exam 11: Stockholders Equity

A company would repurchase its own stock for all of the following reasons except

What is substance over form and how does this concept relate to the presentation of preferred stock?

When a company purchases treasury stock, which of the following statements is true?

The Stockholders' Equity section of the balance sheet of Sea Turtle Company reveals the following information: There have been two issues of stock since the corporation began business. The average issue price per share of stock was

Select the letter of the term each statement best describes. -When the stock of a corporation is repurchased with no intention to reissue at a later date.

Winslow Corporation reported the following in the stockholders' equity section of its balance sheet at December 31, 2015:

Port, Inc. paid a cash dividend on January 2 that had been declared prior to the end of its fiscal year. This transaction to pay the dividend will

Name two different examples of items that can be received in addition to cash in exchange for issuing stock. Describe how the value of each item affects additional paid-in capital.

Select the letter of the term each statement best describes. -The amount received for the issuance of stock in excess of the par value of the stock.

Select the letter of the term each statement best describes. -Creation of additional shares of stock with a concurrent reduction of the par value of the stock.

Which of the following is false regarding the issue of stock versus the issue of bonds to raise capital?

Which of the following is true?

Many firms operate at a dividend payout ratio of less than 50%. Why don't firms pay a larger percentage of income as dividends?

Explain the differences between a partnership and sole proprietorship. Include in your discussion whether either is considered a separate legal entity.

Stock dividends involve the issuance of additional shares of stock.

All changes in all stockholders' equity accounts must be shown in the Stockholders' Equity section of the balance sheet.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

International-Financial-Reporting-Standards

Filters