Question 1

Consider the following financial statement information:
   
Calculate the return on common equity and earnings per share ratios.

Accepted Answer

Return on common equity: ($10,

Question 2

Many stockholders choose to invest in preferred stock because

Accepted Answer

A) preferred stock can always be converted into common stock at the stockholder's option. 
B) the preferred dividend distributions are generally increased each year. 
C) dividends are distributed to preferred stockholders before common stockholders. 
D) preferred stock includes the right to participate in management decisions through voting privileges. 
A) preferred stock can always be converted into common stock at the stockholder's option. 
B) the preferred dividend distributions are generally increased each year. 
C) dividends are distributed to preferred stockholders before common stockholders. 
D) preferred stock includes the right to participate in management decisions through voting privileges.

Question 3

An addition to employee compensation whereby the corporation provides a right to purchase stock at a set price is called

Accepted Answer

A) treasury stock. 
B) a stock option. 
C) the conversion privilege. 
D) a call option. 
A) treasury stock. 
B) a stock option. 
C) the conversion privilege. 
D) a call option.

Question 4

Refer to Ladder Distributors. Suppose the company reissued 1,000 shares of its treasury stock on June 1, 2015, for $44 each. Which of the following is true regarding the entry required to record this transaction?

Accepted Answer

A) A debit to treasury stock is required for $44,000. 
B) A credit to treasury stock is required for $50,000. 
C) A credit to retained earnings is required for $6,000. 
D) A debit to paid-in capital from treasury stock transactions is required for $6,000. 
A) A debit to treasury stock is required for $44,000. 
B) A credit to treasury stock is required for $50,000. 
C) A credit to retained earnings is required for $6,000. 
D) A debit to paid-in capital from treasury stock transactions is required for $6,000.

Question 5

When a corporation issued stock to stockholders, explain the use of the account for paid-in capital in excess of par value.

Accepted Answer

The amount recorded in the account for p

Question 6

Match the following terms to their correct definition.
a.Articles of incorporation
i.Equity
b.Common stock
j.Exercise (strike)price
c.Contributed capital
k.Liquidating dividend
d.Corporate charter
l.No-par stock
e.Current dividend preference
m.Payment date
f.Date of record
n.Preferred stock
g.Declaration date
o.Prior period adjustment
h.Dividends in arrears
p.Return on common equity
-Dividends that are paid out of contributed capital because retained earnings have been reduced to zero.

Accepted Answer

The answer of Match the following terms to their correct...

Question 7

If a corporation declares a 2-for-1 stock split, which of the following is true?

Accepted Answer

A) A journal entry is required to show the effect on the stockholders' equity accounts. 
B) The stockholders will have a higher proportionate ownership share after the split. 
C) The par value will be reduced to half of the pre-split par value. 
D) The market price of the stock is expected to increase after the split. 
A) A journal entry is required to show the effect on the stockholders' equity accounts. 
B) The stockholders will have a higher proportionate ownership share after the split. 
C) The par value will be reduced to half of the pre-split par value. 
D) The market price of the stock is expected to increase after the split.

Question 8

Error corrections which involve restatement of prior period income must be reported

Accepted Answer

A) in a separate account within the equity section of the balance sheet. 
B) within "unrestricted retained earnings" on the balance sheet, with footnote disclosure to describe the appropriation. 
C) as a prior period adjustment on the statement of changes in retained earnings. 
D) only within the footnotes accompanying the financial statements. 
A) in a separate account within the equity section of the balance sheet. 
B) within "unrestricted retained earnings" on the balance sheet, with footnote disclosure to describe the appropriation. 
C) as a prior period adjustment on the statement of changes in retained earnings. 
D) only within the footnotes accompanying the financial statements.

Question 9

The corporation's retained earnings is computed by adding the beginning balance and net income, then subtracting the current year ____________________.

Accepted Answer

The answer of The corporation's retained earnings is computed by...

Question 10

The _________________ preference is a preferred stock feature that provides for the current stated dividends to be paid to preferred stockholders before they are paid to common stockholders.

Accepted Answer

The answer of The _________________ preference is a preferred stock...

Question 11

Refer to Lanier Tech. Assume that no dividends were declared or paid during the first year of operations. What is the dollar amount of total stockholders' equity reported on the balance sheet at December 31, 2015?

Accepted Answer

A) $ 60,000 
B) $120,000 
C) $555,000 
D) $725,000 
A) $ 60,000 
B) $120,000 
C) $555,000 
D) $725,000

Question 12

From 2012 to 2014, Lumber Liquidators had the following capital structure:
   The board of directors determined the total amount available for dividends in each year from 2012 through 2014 as shown in the following table. Complete the table to indicate the portion of the dividend allocated to preferred and common stockholders in each year. Assume that the preferred stock is noncumulative and nonparticipating.

Accepted Answer

@#IMG-DLM&_TB2047_00

Question 13

MATCHING
-Shares of stock that are repurchased with the intention of no longer being traded.

Accepted Answer

The answer of MATCHING
-Shares of stock that are repurchased with...

Question 14

The FASB's concept of comprehensive income

Accepted Answer

A) allows items that are not necessarily under management's control, such as currency translation adjustments, to be shown as an appropriation of retained earnings. 
B) has a primary drawback because it allows management considerable flexibility in determining the net income figure. 
C) excludes transactions that involve the payment of dividends and other transactions affecting owners. 
D) requires that all transactions representing changes in asset and liability accounts must be shown on the income statement. 
A) allows items that are not necessarily under management's control, such as currency translation adjustments, to be shown as an appropriation of retained earnings. 
B) has a primary drawback because it allows management considerable flexibility in determining the net income figure. 
C) excludes transactions that involve the payment of dividends and other transactions affecting owners. 
D) requires that all transactions representing changes in asset and liability accounts must be shown on the income statement.

Question 15

Distinguish between par value and market value. Which measure is the better indicator of the true value of the stock?

Accepted Answer

Par value is an arbitrary monetary amoun

Question 16

If a corporation repurchases 500 shares of its previously-issued common stock then retires these shares, which of the following is true?

Accepted Answer

A) A new class of stock must be issued in place of the 500 retired shares. 
B) Approval from the state is required for this type of transaction. 
C) A gain or loss must be recorded, depending on the difference between the repurchase cost and the original issue price. 
D) The common stock and paid-in capital accounts must be decreased by the amount of the original issue price. 
A) A new class of stock must be issued in place of the 500 retired shares. 
B) Approval from the state is required for this type of transaction. 
C) A gain or loss must be recorded, depending on the difference between the repurchase cost and the original issue price. 
D) The common stock and paid-in capital accounts must be decreased by the amount of the original issue price.

Question 17

The stockholders' equity section of the balance sheet at January 1, 2015, appeared as follows:
   On March 1, 2015, the company sold 800 shares of treasury stock at $25 per share.

Accepted Answer

The answer of The stockholders' equity section of the balance...

Question 18

Match the terms to the definitions.
a.authorized shares
i.stock option
b.issued shares
j.stock warrant
c.outstanding shares
k.treasury stock
d.par value
l.call provision
e.stated capital (legal capital)
m.earnings per share
f.preemptive right
n.dividend yield ratio
g.retained earnings
o.dividend payout ratio
h.stock split
-A decrease in the par value of a class of stock brought about by the exchange of original shares for a greater number of new shares.

Accepted Answer

The answer of Match the terms to the definitions.
a.authorized shares
i.stock...

Question 19

Differentiate a cumulative dividend preference from a participating dividend preference. Describe the circumstances under which these preferences would be utilized.

Accepted Answer

A cumulative dividend preference require

Question 20

Which of the following statements is true with regard to 7% cumulative, participating preferred stock?

Accepted Answer

A) Stockholders who hold this type of stock are guaranteed a dividend each year. 
B) The issue price of this stock is reported in the preferred stock account on the balance sheet. 
C) If the corporation pays a per share dividend in excess of 7% of the preferred stock's par value and there are no dividends in arrears, the preferred shares will receive a share of the amounts available for distribution as dividends to other classes of stock. 
D) If dividends are not declared, they accumulate and a liability must be reported on the balance sheet for any amount in arrears that is owed to the preferred stockholders. 
A) Stockholders who hold this type of stock are guaranteed a dividend each year. 
B) The issue price of this stock is reported in the preferred stock account on the balance sheet. 
C) If the corporation pays a per share dividend in excess of 7% of the preferred stock's par value and there are no dividends in arrears, the preferred shares will receive a share of the amounts available for distribution as dividends to other classes of stock. 
D) If dividends are not declared, they accumulate and a liability must be reported on the balance sheet for any amount in arrears that is owed to the preferred stockholders.

Consider the following financial statement information: Calculate the return on common equity and earnings per share ratios.

Many stockholders choose to invest in preferred stock because

An addition to employee compensation whereby the corporation provides a right to purchase stock at a set price is called

Refer to Ladder Distributors. Suppose the company reissued 1,000 shares of its treasury stock on June 1, 2015, for $44 each. Which of the following is true regarding the entry required to record this transaction?

When a corporation issued stock to stockholders, explain the use of the account for paid-in capital in excess of par value.

If a corporation declares a 2-for-1 stock split, which of the following is true?

Error corrections which involve restatement of prior period income must be reported

The corporation's retained earnings is computed by adding the beginning balance and net income, then subtracting the current year ____________________.

The _________________ preference is a preferred stock feature that provides for the current stated dividends to be paid to preferred stockholders before they are paid to common stockholders.

Refer to Lanier Tech. Assume that no dividends were declared or paid during the first year of operations. What is the dollar amount of total stockholders' equity reported on the balance sheet at December 31, 2015?

MATCHING -Shares of stock that are repurchased with the intention of no longer being traded.

The FASB's concept of comprehensive income

Distinguish between par value and market value. Which measure is the better indicator of the true value of the stock?

If a corporation repurchases 500 shares of its previously-issued common stock then retires these shares, which of the following is true?

The stockholders' equity section of the balance sheet at January 1, 2015, appeared as follows: On March 1, 2015, the company sold 800 shares of treasury stock at $25 per share.

Differentiate a cumulative dividend preference from a participating dividend preference. Describe the circumstances under which these preferences would be utilized.

Which of the following statements is true with regard to 7% cumulative, participating preferred stock?

Accounting and the Financial Statements

The Accounting Information System

Accrual Accounting

Internal Control and Cash

Sales and Receivables

Cost of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long-Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 10: Stockholders Equity

Consider the following financial statement information: Calculate the return on common equity and earnings per share ratios.

Many stockholders choose to invest in preferred stock because

An addition to employee compensation whereby the corporation provides a right to purchase stock at a set price is called

Refer to Ladder Distributors. Suppose the company reissued 1,000 shares of its treasury stock on June 1, 2015, for $44 each. Which of the following is true regarding the entry required to record this transaction?

When a corporation issued stock to stockholders, explain the use of the account for paid-in capital in excess of par value.

If a corporation declares a 2-for-1 stock split, which of the following is true?

Error corrections which involve restatement of prior period income must be reported

The corporation's retained earnings is computed by adding the beginning balance and net income, then subtracting the current year ____________________.

The _________________ preference is a preferred stock feature that provides for the current stated dividends to be paid to preferred stockholders before they are paid to common stockholders.

Refer to Lanier Tech. Assume that no dividends were declared or paid during the first year of operations. What is the dollar amount of total stockholders' equity reported on the balance sheet at December 31, 2015?

MATCHING -Shares of stock that are repurchased with the intention of no longer being traded.

The FASB's concept of comprehensive income

Distinguish between par value and market value. Which measure is the better indicator of the true value of the stock?

If a corporation repurchases 500 shares of its previously-issued common stock then retires these shares, which of the following is true?

The stockholders' equity section of the balance sheet at January 1, 2015, appeared as follows: On March 1, 2015, the company sold 800 shares of treasury stock at $25 per share.

Differentiate a cumulative dividend preference from a participating dividend preference. Describe the circumstances under which these preferences would be utilized.

Which of the following statements is true with regard to 7% cumulative, participating preferred stock?

Accounting and the Financial Statements

The Accounting Information System

Accrual Accounting

Internal Control and Cash

Sales and Receivables

Cost of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long-Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters