Question 1

Noncash assets received as consideration for the issue of stock are always valued based on the fair value of the stock.

Accepted Answer

A) True 
 B)False

Question 2

A statement of comprehensive income does not include:

Accepted Answer

A)  Gains resulting from the return on pension assets exceeding expectations. 
B)  Gains and losses on unsold held-to-maturity debt securities. 
C)  Adjustments from foreign currency translation. 
D)  Prior service cost of pensions. 
A)  Gains resulting from the return on pension assets exceeding expectations. 
B)  Gains and losses on unsold held-to-maturity debt securities. 
C)  Adjustments from foreign currency translation. 
D)  Prior service cost of pensions.

Question 3

Paid-in capital in excess of par is reported:

Accepted Answer

A)  As a reduction of shareholders' equity. 
B)  As a noncurrent asset. 
C)  As a noncurrent liability. 
D)  As an increase in shareholders' equity. 
A)  As a reduction of shareholders' equity. 
B)  As a noncurrent asset. 
C)  As a noncurrent liability. 
D)  As an increase in shareholders' equity.

Question 4

What is comprehensive income and how does it differ from net income? Where is it reported in the balance sheet?

Accepted Answer

Comprehensive income is a broader view o

Question 5

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term.
-Earnings-price ratio

Accepted Answer

A) May be increased when net income increases. 
B) A feature of preferred stock. 
C) May be reduced when shares are retired. 
D) Designed to increase the market value of stock. 
E) Reduces the net proceeds from selling shares. 
A) May be increased when net income increases. 
B) A feature of preferred stock. 
C) May be reduced when shares are retired. 
D) Designed to increase the market value of stock. 
E) Reduces the net proceeds from selling shares.

Question 6

The par amount of common stock represents:

Accepted Answer

A)  The arbitrary dollar amount assigned to a share of stock. 
B)  The liquidation value of a share. 
C)  The book value of a share of stock. 
D)  The amount received when the stock was issued. 
A)  The arbitrary dollar amount assigned to a share of stock. 
B)  The liquidation value of a share. 
C)  The book value of a share of stock. 
D)  The amount received when the stock was issued.

Question 7

The following partial information is taken from the comparative balance sheet of Levi Corporation:  
- What was the amount of Levi's net income for the year 2018?

Accepted Answer

A)  $0. 
B)  $40 million. 
C)  $62 million. 
D)  Cannot be determined from the given information. 
A)  $0. 
B)  $40 million. 
C)  $62 million. 
D)  Cannot be determined from the given information.

Question 8

Net income and other comprehensive income can be reported in a single statement of comprehensive income using:

Accepted Answer

A)  IFRS. 
B)  U.S. GAAP. 
C)  Neither U.S. GAAP nor IFRS. 
D)  Both U.S. GAAP and IFRS. 
A)  IFRS. 
B)  U.S. GAAP. 
C)  Neither U.S. GAAP nor IFRS. 
D)  Both U.S. GAAP and IFRS.

Question 9

The Model Business Corporation Act:

Accepted Answer

A)  Uses the words "common" and "preferred" in describing distinguishing characteristics of stock. 
B)  Defines legal capital as the amount of net assets not available for distribution to shareholders. 
C)  Provides guidance for choosing an appropriate par for new issues of stock. 
D)  Has affected the laws of most states. 
A)  Uses the words "common" and "preferred" in describing distinguishing characteristics of stock. 
B)  Defines legal capital as the amount of net assets not available for distribution to shareholders. 
C)  Provides guidance for choosing an appropriate par for new issues of stock. 
D)  Has affected the laws of most states.

Question 10

Issued stock refers to the number of shares:

Accepted Answer

A)  Outstanding plus treasury shares. 
B)  Shares issued for cash. 
C)  Owned by shareholders. 
D)  That may be issued under state law. 
A)  Outstanding plus treasury shares. 
B)  Shares issued for cash. 
C)  Owned by shareholders. 
D)  That may be issued under state law.

Question 11

Retained earnings represent:

Accepted Answer

A)  Earned capital. 
B)  Cash. 
C)  Assets. 
D)  Net assets. 
A)  Earned capital. 
B)  Cash. 
C)  Assets. 
D)  Net assets.

Question 12

C. Worthy Ships initially issued 300,000 shares of $1 par stock for $1,500,000 in 2018. In 2020, the company repurchased 30,000 shares for $300,000. In 2021, 15,000 of the repurchased shares were resold for $240,000. In its balance sheet dated December 31, 2021, C. Worthy's treasury stock account shows a balance of:

Accepted Answer

A)  $ 0 
B)  $ 60,000 
C)  $150,000 
D)  $300,000 
A)  $ 0 
B)  $ 60,000 
C)  $150,000 
D)  $300,000

Question 13

The 12/31/2018 balance sheet of Despot Inc. included the following:   In January 2018, Despot recorded a transaction with this journal entry:  
- Despot declared a property dividend to give marketable equity securities to its common stockholders. The securities had cost Despot $7 million and currently have a fair value of $16 million. Which of the following would be included in recording the property dividend declaration?

Accepted Answer

A)  Increase in a liability for $16 million. 
B)  Decrease in retained earnings for $7 million. 
C)  Decrease in marketable securities by $16 million. 
D)  All of these answer choices are correct. 
A)  Increase in a liability for $16 million. 
B)  Decrease in retained earnings for $7 million. 
C)  Decrease in marketable securities by $16 million. 
D)  All of these answer choices are correct.

Question 14

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term.
-Retained earnings

Accepted Answer

A) May be increased when net income increases. 
B) A feature of preferred stock. 
C) May be reduced when shares are retired. 
D) Designed to increase the market value of stock. 
E) Reduces the net proceeds from selling shares. 
A) May be increased when net income increases. 
B) A feature of preferred stock. 
C) May be reduced when shares are retired. 
D) Designed to increase the market value of stock. 
E) Reduces the net proceeds from selling shares.

Question 15

Fowler Co.'s balance sheet showed the following at December 31, 2018:   A cash dividend is declared on December 31, 2018, and is payable on January 20, 2019, to shareholders of record on January 10, 2019.
Required:
(1.) Prepare all appropriate journal entries, assuming a cash dividend in the amount of $1.00 per share.
(2.) Prepare all appropriate journal entries, assuming a cash dividend in the amount of $5.00 per share.

Accepted Answer

@#IMG-DLM& *Since the dividend

Question 16

Revenue and expense items and components of other comprehensive income can be reported in a single statement of comprehensive income using:

Accepted Answer

A)  U.S. GAAP. 
B)  IFRS. 
C)  Both U.S. GAAP and IFRS. 
D)  Neither U.S. GAAP nor IFRS. 
A)  U.S. GAAP. 
B)  IFRS. 
C)  Both U.S. GAAP and IFRS. 
D)  Neither U.S. GAAP nor IFRS.

Question 17

The shareholders' equity of Nick Co. includes the items shown below. The board of directors of Nick declared cash dividends of $4 million, $8 million, and $50 million in each of its first 3 years of operation: 2016, 2017, and 2018, respectively.
Common stock, $1 par, 50,000,000 shares outstanding
Preferred stock, 6%, $100 par, 1,000,000 shares outstanding
Required:
Determine the amount of dividends per share on preferred and common stock for each of the three years. The preferred stock is noncumulative and nonparticipating.

Accepted Answer

($ in millions, except per sha

Question 18

F Co. declares a 5% stock dividend. If the market price at declaration is $12 per share, a shareholder with 110 shares likely would receive:

Accepted Answer

A)  Five additional shares. 
B)  Fractional share rights for 5½ shares. 
C)  Five additional shares and $6 in cash. 
D)  Five additional shares and a fractional share right for 2½ shares. 
A)  Five additional shares. 
B)  Fractional share rights for 5½ shares. 
C)  Five additional shares and $6 in cash. 
D)  Five additional shares and a fractional share right for 2½ shares.

Question 19

Renaldo Cross Company views share buybacks as treasury stock. Renaldo repurchased shares and then later sold the shares at more than their acquisition price. What is the effect of the sale of the treasury stock on each of the following?

Accepted Answer

A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D 
A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D

Question 20

On January 1, 2018, the board of directors of Goby Inc. declared a $540,000 dividend. The following data is from the balance sheet of Goby on that date:   How much is the liquidating dividend?

Accepted Answer

A)  $140,000. 
B)  $240,000. 
C)  $290,000. 
D)  None of these answer choices are correct. 
A)  $140,000. 
B)  $240,000. 
C)  $290,000. 
D)  None of these answer choices are correct.

Noncash assets received as consideration for the issue of stock are always valued based on the fair value of the stock.

A statement of comprehensive income does not include:

Paid-in capital in excess of par is reported:

What is comprehensive income and how does it differ from net income? Where is it reported in the balance sheet?

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Earnings-price ratio

The par amount of common stock represents:

The following partial information is taken from the comparative balance sheet of Levi Corporation: - What was the amount of Levi's net income for the year 2018?

Net income and other comprehensive income can be reported in a single statement of comprehensive income using:

The Model Business Corporation Act:

Issued stock refers to the number of shares:

Retained earnings represent:

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Retained earnings

Revenue and expense items and components of other comprehensive income can be reported in a single statement of comprehensive income using:

F Co. declares a 5% stock dividend. If the market price at declaration is $12 per share, a shareholder with 110 shares likely would receive:

Renaldo Cross Company views share buybacks as treasury stock. Renaldo repurchased shares and then later sold the shares at more than their acquisition price. What is the effect of the sale of the treasury stock on each of the following?

On January 1, 2018, the board of directors of Goby Inc. declared a $540,000 dividend. The following data is from the balance sheet of Goby on that date: How much is the liquidating dividend?

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, Comprehensive Income, and the Statement of Cash Flows

Revenue Recognition

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Inventories: Additional Issues

Property, Plant, and Equipment and Intangible Assets: Acquisition

Property, Plant, and Equipment and Intangible Assets: Utilization and Disposition

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Share-Based Compensation and Earnings Per Share

Accounting Changes and Error Corrections

The Statement of Cash Flows Revisited

Filters

Exam 18: Shareholders Equity

Noncash assets received as consideration for the issue of stock are always valued based on the fair value of the stock.

A statement of comprehensive income does not include:

Paid-in capital in excess of par is reported:

What is comprehensive income and how does it differ from net income? Where is it reported in the balance sheet?

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Earnings-price ratio

The par amount of common stock represents:

The following partial information is taken from the comparative balance sheet of Levi Corporation: - What was the amount of Levi's net income for the year 2018?

Net income and other comprehensive income can be reported in a single statement of comprehensive income using:

The Model Business Corporation Act:

Issued stock refers to the number of shares:

Retained earnings represent:

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Retained earnings

Revenue and expense items and components of other comprehensive income can be reported in a single statement of comprehensive income using:

F Co. declares a 5% stock dividend. If the market price at declaration is $12 per share, a shareholder with 110 shares likely would receive:

Renaldo Cross Company views share buybacks as treasury stock. Renaldo repurchased shares and then later sold the shares at more than their acquisition price. What is the effect of the sale of the treasury stock on each of the following?

On January 1, 2018, the board of directors of Goby Inc. declared a $540,000 dividend. The following data is from the balance sheet of Goby on that date: How much is the liquidating dividend?

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, Comprehensive Income, and the Statement of Cash Flows

Revenue Recognition

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Inventories: Additional Issues

Property, Plant, and Equipment and Intangible Assets: Acquisition

Property, Plant, and Equipment and Intangible Assets: Utilization and Disposition

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Share-Based Compensation and Earnings Per Share

Accounting Changes and Error Corrections

The Statement of Cash Flows Revisited

Filters