Question 1

Par value per share is the price at which a share of stock is bought or sold.

Accepted Answer

A) True 
 B)False

Question 2

A company had the following stockholders' equity on January 1:
   On January 10,the company declared a 40% stock dividend to holders of record on January 25,to be distributed January 31.The market value of the stock on January 10 prior to the dividend was $20 per share.What is the book value per common share on February 1?

Accepted Answer

Total stockholders' equity does not chan

Question 3

Stocks with a price-earnings ratio greater than 20 to 25 are likely to be underpriced.

Accepted Answer

A) True 
 B)False

Question 4

A company reported stockholders' equity on January 1 of the current year as follows:
 Common Stock,$5 par value,1,000,000 shares authorized,600,000 shares issued; Paid-in Capital in Excess of Par Value,Common Stock,$1,025,000; Retained Earnings,$2,850,000.Prepare journal entries to record the following transactions:

Accepted Answer

The answer of A company reported stockholders' equity on January...

Question 5

Callable preferred stock gives its holders the option of exchanging their preferred shares into common shares at a specified rate.

Accepted Answer

A) True 
 B)False

Question 6

A reverse stock split reduces the market value per share and the par value per share of stock.

Accepted Answer

A) True 
 B)False

Question 7

Treasury stock is classified as:

Accepted Answer

A) An asset account. 
B) A contra asset account. 
C) A revenue account. 
D) A contra equity account. 
E) A liability account. 
A) An asset account. 
B) A contra asset account. 
C) A revenue account. 
D) A contra equity account. 
E) A liability account.

Question 8

A company reported the following stockholders' equity on January 1 of the current year:
   Prepare journal entries for the following selected transactions related to this company's stock during the current year:

Accepted Answer

The answer of A company reported the following stockholders' equity...

Question 9

If a corporation receives assets other than cash in exchange for stock,it records the assets received at their market value as of the date of the transaction.

Accepted Answer

A) True 
 B)False

Question 10

A premium on common stock:

Accepted Answer

A) Is the amount paid in excess of par by purchasers of newly issued stock. 
B) Is the difference between par value and issue price when the amount paid is below par. 
C) Represents profit from issuing stock. 
D) Represents capital gain on sale of stock. 
E) Is prohibited in most states. 
A) Is the amount paid in excess of par by purchasers of newly issued stock. 
B) Is the difference between par value and issue price when the amount paid is below par. 
C) Represents profit from issuing stock. 
D) Represents capital gain on sale of stock. 
E) Is prohibited in most states.

Question 11

The least amount that the buyers of stock must contribute to the corporation or be subject to paying at a future date is called ____________________________.

Accepted Answer

minimum le

Question 12

On August 1,a corporation issued 15,000 shares of no-par common stock in exchange for a tract of land having a market value of $215,000.The common stock has a stated value of $10 per share.Prepare the general journal entry to record this transaction.

Accepted Answer

The answer of On August 1,a corporation issued 15,000 shares...

Question 13

A large stock dividend only occurs when a distribution of more than 50% of previously outstanding shares is issued.

Accepted Answer

A) True 
 B)False

Question 14

________________________ is the number of shares that a corporation's charter allows it to sell.

Accepted Answer

authorized

Question 15

If a company resells treasury stock below the acquisition cost,a loss from the sale of treasury stock is recorded.

Accepted Answer

A) True 
 B)False

Question 16

How is the retirement of stock recorded?

Accepted Answer

When a company's own stock is retired,al

Question 17

A company is authorized to issue 750,000 shares of $5 par value common stock.Prepare journal entries to record the following selected transactions that occurred during the company's first year of operations:

Accepted Answer

The answer of A company is authorized to issue 750,000...

Question 18

Shamrock Company had net income of $30,000.The weighted-average common shares outstanding were 8,000.The company declared a $2,700 dividend on its noncumulative,nonparticipating preferred stock.There were no other stock transactions.The company's earnings per share is:

Accepted Answer

A) $2.87. 
B) $2.73. 
C) $3.41. 
D) $3.16. 
E) $3.75. 
A) $2.87. 
B) $2.73. 
C) $3.41. 
D) $3.16. 
E) $3.75.

Question 19

A company has 40,000 shares of common stock outstanding.The stockholders' equity applicable to common shares is $470,000,and the par value per common share is $10.The book value per share is:

Accepted Answer

A) $ 0.09. 
B) $ 1.75. 
C) $10.00. 
D) $11.75. 
E) $47.50. 
A) $ 0.09. 
B) $ 1.75. 
C) $10.00. 
D) $11.75. 
E) $47.50.

Question 20

A dividend preference for preferred stock means that:

Accepted Answer

A) Preferred stockholders are allocated their dividends before dividends are allocated to common shareholders. 
B) Preferred shareholders are guaranteed dividends. 
C) Dividends are paid quarterly. 
D) Preferred stockholders prefer dividends more than common stockholders. 
E) Dividends must be declared on preferred stock. 
A) Preferred stockholders are allocated their dividends before dividends are allocated to common shareholders. 
B) Preferred shareholders are guaranteed dividends. 
C) Dividends are paid quarterly. 
D) Preferred stockholders prefer dividends more than common stockholders. 
E) Dividends must be declared on preferred stock.

Exam 13: Accounting for Corporations

Par value per share is the price at which a share of stock is bought or sold.

Stocks with a price-earnings ratio greater than 20 to 25 are likely to be underpriced.

Callable preferred stock gives its holders the option of exchanging their preferred shares into common shares at a specified rate.

A reverse stock split reduces the market value per share and the par value per share of stock.

Treasury stock is classified as:

A company reported the following stockholders' equity on January 1 of the current year: Prepare journal entries for the following selected transactions related to this company's stock during the current year:

If a corporation receives assets other than cash in exchange for stock,it records the assets received at their market value as of the date of the transaction.

A premium on common stock:

The least amount that the buyers of stock must contribute to the corporation or be subject to paying at a future date is called ____________________________.

On August 1,a corporation issued 15,000 shares of no-par common stock in exchange for a tract of land having a market value of $215,000.The common stock has a stated value of $10 per share.Prepare the general journal entry to record this transaction.

A large stock dividend only occurs when a distribution of more than 50% of previously outstanding shares is issued.

________________________ is the number of shares that a corporation's charter allows it to sell.

If a company resells treasury stock below the acquisition cost,a loss from the sale of treasury stock is recorded.

How is the retirement of stock recorded?

A company is authorized to issue 750,000 shares of $5 par value common stock.Prepare journal entries to record the following selected transactions that occurred during the company's first year of operations:

Shamrock Company had net income of $30,000.The weighted-average common shares outstanding were 8,000.The company declared a $2,700 dividend on its noncumulative,nonparticipating preferred stock.There were no other stock transactions.The company's earnings per share is:

A company has 40,000 shares of common stock outstanding.The stockholders' equity applicable to common shares is $470,000,and the par value per common share is $10.The book value per share is:

A dividend preference for preferred stock means that:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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