Question 1

Which is the first date when employees can exercise their stock options?

Accepted Answer

A)  vesting date 
B)  grant date 
C)  exercise date 
D)  liquidating date 
A)  vesting date 
B)  grant date 
C)  exercise date 
D)  liquidating date A

Question 2

__________ means that a company will buy back those receivables that are not collected by the company they are factored to.

Accepted Answer

With recourse

Question 3

Under the fair value method of accounting for stock options,firms must value stock options on the

Accepted Answer

A)  grant date. 
B)  intrinsic date. 
C)  measurement date. 
D)  fair value date. 
A)  grant date. 
B)  intrinsic date. 
C)  measurement date. 
D)  fair value date. A

Question 4

Following is the shareholders' equity section of Morgan Supplies on a day its common stock is trading at $77 per share.
 $\begin{array}{|l|r|}
\hline \text { Common stock ( } \$ 2 \text { par value, } 30,000 \text { shares issued and outstanding) } & \$ 60,000 \
\hline \text { Additional paid-in capital on common stock } & 1,200,000 \
\hline \text { Retained earnings } & 3,000,000
\end{array}$ 
Required:a.Use the financial statement template below to show the financial statement effects of
the following dividend events.(Assume that the events are independent.)
(1)Cash dividend declaration and payment of $1 per share
(2)Property dividend declaration and payment of shares representing a short-term
investment in Screen Products,Ltd.,with a fair value of $15,000
(3)10 percent stock dividend
(4)100 percent stock dividend
(5)3-for-1 stock split
(6)1-for-2 reverse stock split
   
Journal entry (optional):Journal entry (optional):
b.Which events changed the book value of common equity? 
c.Under what conditions will these events lead to future increases and decreases in ROE?

Accepted Answer

(a)
 @#IMG-DLM& 
(b)Journal entries
 (1) Retained

Question 5

In the chart below,assign the directional effect (I = increase,D = decrease,or NE = no effect)of each of the following six transactions on the components of the book value of common shareholders' equity.
a.Small stock dividend declared and issued.
b.2-for-1 stock split announced and issued.
c.Stock options granted.
d.Recognition of compensation expense on stock options.
e.Stock options exercised.
f.Stock options expired.

Accepted Answer

None

Question 6

Assuming that Santa Corporation was required to capitalize its operating lease how would the company's fixed asset ratio change under this assumption.

Accepted Answer

A)  increase 
B)  decrease 
C)  no effect 
D)  unable to determine 
A)  increase 
B)  decrease 
C)  no effect 
D)  unable to determine

Question 7

A.Listed below are 12 accounting liabilities.
1. Insurance paid in advance
2.Interest Payable
3.Unsettled lawsuits where a reasonable estimate of loss can be determined and the loss is probable 
4.Accounts payable
5.Warranties payable
6.Bonds payable
7.Accrued Liabilities
8.Taxes payable
9.Employment commitments
10.Notes payable
11.Purchase commitments
12.Salaries payable
Place the accounting liabilities in one of the following six categories:
1.Insurance paid in advance
2.Interest Payable
3.Unsettled lawsuits where a reasonable estimate of loss can be determined and the loss is probable 
4.Accounts payable
5.Warranties payable
6.Bonds payable
7.Accrued Liabilities
8.Taxes payable
9.Employment commitments
10.Notes payable
11.Purchase commitments
12.Salaries payable
B.In addition,determine which of the liabilities would be recognized on the balance sheet as liabilities and which would not be recognized.
Suggestion: format your answer as follows (this is not a correct sample answer):
a.Obligations with fixed payment dates and amounts (not generally recognized):
1.Rent Payable

Accepted Answer

a. Obligations with fixed payment dates

Question 8

Which is the date when a firm gives a stock option to employees?

Accepted Answer

A)  vesting date 
B)  grant date 
C)  exercise date 
D)  market date 
A)  vesting date 
B)  grant date 
C)  exercise date 
D)  market date

Question 9

Which is the date when employees elect to exchange the option and cash for shares of common stock?

Accepted Answer

A)  vesting date 
B)  grant date 
C)  exercise date 
D)  market date 
A)  vesting date 
B)  grant date 
C)  exercise date 
D)  market date

Question 10

Convertible preferred stock has both the attributes of _______ and _____________________________________.

Accepted Answer

The answer of Convertible preferred stock has both the attributes...

Question 11

In the chart below,assign the directional effect (I = increase,D = decrease,or NE = no effect)of each of the following six transactions on the components of the book value of common shareholders' equity.
a.Issuance of $1 par value common stock at par value.
b.Stock repurchased and placed in the treasury
c.Cash dividend declared.
d.Shareholders identified for dividend distribution on the date of record
e.Property dividend declared and paid.
f.Large stock dividend declared and issued.

Accepted Answer

None

Question 12

NOTE: The following problem requires present value information.
On January 1,2012,Porter Corporation signed a five-year non-cancelable lease for certain machinery.The terms of the lease called for:
A)Porter to make annual payments of $60,000 at the end of each year (starting on Dec.31,2012)for five years.Porter must return the equipment to the lessor end of this period.
B)The machinery has an estimated useful life of 6 years and no expected salvage value.
C)Porter uses the straight-line method of depreciation for all of its fixed assets.
D)Porter's incremental borrowing rate is 8%.
E)The fair value of the asset at January 1,2012 is $275,000.
Required:
1.Discuss whether Porter should account for the lease as an operating or capital lease and why.
2.Using the above information determine how the lease would affect Porter's financial statements in 2013.Use the balance sheet equation below to show the effects.
C + N$A = L + CC + AOCI + RE

Accepted Answer

1. The lease should be accounted for as

Question 13

Which of the following is the date on which a company incurs a legal liability to distribute the dividend to owners of the stock?

Accepted Answer

A)  date of record 
B)  commitment date 
C)  date of declaration 
D)  date of payment 
A)  date of record 
B)  commitment date 
C)  date of declaration 
D)  date of payment

Question 14

All of the following are correct regarding operating leases except:

Accepted Answer

A)  Cash outflow is in the form of rent payments 
B)  The rights to use the property for a specified period of time are conferred to the lessee by the lessor. 
C)  At the end of the lease the lessee returns the property to the lessor 
D)  Depreciation expense can be recorded on the books by the lessee 
A)  Cash outflow is in the form of rent payments 
B)  The rights to use the property for a specified period of time are conferred to the lessee by the lessor. 
C)  At the end of the lease the lessee returns the property to the lessor 
D)  Depreciation expense can be recorded on the books by the lessee

Question 15

All of the following are benefits of leasing except:

Accepted Answer

A)  They have the ability to shift the tax benefits from depreciation and other deductions from a lessee that has little or no taxable income to a lessor that has substantial taxable income. 
B)  They provide flexibility to change capacity as needed without having to purchase or sell assets. 
C)  They have the ability to reduce the risk of technological obsolescence, relative to outright ownership, by maintaining the flexibility to shift to technologically more advanced assets. 
D)  In an operating lease, the lessee recognizes the signing of the lease as the simultaneous acquisition of a long-term asset and the incurring of a long-term liability for lease payments. 
A)  They have the ability to shift the tax benefits from depreciation and other deductions from a lessee that has little or no taxable income to a lessor that has substantial taxable income. 
B)  They provide flexibility to change capacity as needed without having to purchase or sell assets. 
C)  They have the ability to reduce the risk of technological obsolescence, relative to outright ownership, by maintaining the flexibility to shift to technologically more advanced assets. 
D)  In an operating lease, the lessee recognizes the signing of the lease as the simultaneous acquisition of a long-term asset and the incurring of a long-term liability for lease payments.

Question 16

An agreement in which a purchaser agrees to pay specified amounts periodically to a seller for products or services is known as a ________________________________________.

Accepted Answer

take-or-pa

Question 17

Which of the following is the date on which a company determines the owners of the stock that will receive a dividend?

Accepted Answer

A)  date of record 
B)  measurement date 
C)  date of declaration 
D)  date of payment 
A)  date of record 
B)  measurement date 
C)  date of declaration 
D)  date of payment

Question 18

The _________________________ is the date a firm gives a stock option to employees.

Accepted Answer

The answer of The _________________________ is the date a firm...

Question 19

Which kind of dividend is a return of the original investment by shareholders?

Accepted Answer

A)  cash dividend 
B)  stock dividend 
C)  liquidating dividend 
D)  scrip dividend 
A)  cash dividend 
B)  stock dividend 
C)  liquidating dividend 
D)  scrip dividend

Question 20

Which kind of dividends typically pay dividends with additional shares of the corporation's stock?

Accepted Answer

A)  property dividend 
B)  stock dividend 
C)  liquidating dividend 
D)  scrip dividend 
A)  property dividend 
B)  stock dividend 
C)  liquidating dividend 
D)  scrip dividend

Which is the first date when employees can exercise their stock options?

__________ means that a company will buy back those receivables that are not collected by the company they are factored to.

Under the fair value method of accounting for stock options,firms must value stock options on the

Assuming that Santa Corporation was required to capitalize its operating lease how would the company's fixed asset ratio change under this assumption.

Which is the date when a firm gives a stock option to employees?

Which is the date when employees elect to exchange the option and cash for shares of common stock?

Convertible preferred stock has both the attributes of _ and _______________________________.

Which of the following is the date on which a company incurs a legal liability to distribute the dividend to owners of the stock?

All of the following are correct regarding operating leases except:

All of the following are benefits of leasing except:

An agreement in which a purchaser agrees to pay specified amounts periodically to a seller for products or services is known as a ________________________________________.

Which of the following is the date on which a company determines the owners of the stock that will receive a dividend?

The _________________________ is the date a firm gives a stock option to employees.

Which kind of dividend is a return of the original investment by shareholders?

Which kind of dividends typically pay dividends with additional shares of the corporation's stock?

Overview of Financial Reporting, financial Statement Analysis, and Valuation

Asset and Liability Valuation and Income Measurement

Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows

Profitability Analysis

Risk Analysis

Accounting Quality

Investing Activities

Operating Activities

Forecasting Financial Statements

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow-Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

Filters

Exam 7: Financing Activities

Which is the first date when employees can exercise their stock options?

__________ means that a company will buy back those receivables that are not collected by the company they are factored to.

Under the fair value method of accounting for stock options,firms must value stock options on the

Assuming that Santa Corporation was required to capitalize its operating lease how would the company's fixed asset ratio change under this assumption.

Which is the date when a firm gives a stock option to employees?

Which is the date when employees elect to exchange the option and cash for shares of common stock?

Convertible preferred stock has both the attributes of _______ and _____________________________________.

Which of the following is the date on which a company incurs a legal liability to distribute the dividend to owners of the stock?

All of the following are correct regarding operating leases except:

All of the following are benefits of leasing except:

An agreement in which a purchaser agrees to pay specified amounts periodically to a seller for products or services is known as a ________________________________________.

Which of the following is the date on which a company determines the owners of the stock that will receive a dividend?

The _________________________ is the date a firm gives a stock option to employees.

Which kind of dividend is a return of the original investment by shareholders?

Which kind of dividends typically pay dividends with additional shares of the corporation's stock?

Overview of Financial Reporting, financial Statement Analysis, and Valuation

Asset and Liability Valuation and Income Measurement

Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows

Profitability Analysis

Risk Analysis

Accounting Quality

Investing Activities

Operating Activities

Forecasting Financial Statements

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow-Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

Filters

Convertible preferred stock has both the attributes of _ and _______________________________.