Question 1

Draw two distinctions between accounting for a stock split and accounting for a stock dividend.

Accepted Answer

A stock dividend requires a transfer fro

Question 2

Use the following information to answer the question below. The following transactions involving Culbert Corporation occurred during the year:
  The entry to record the May 3 transaction would be:

Accepted Answer

A)  Treasury Stock,Preferred 20,000
Cash 20,000 
B)  Cash 20,000
Treasury Stock,Preferred 16,000
Paid-in Capital,Treasury Stock 4,000 
C)  Cash 8,000
Retained Earnings 12,000
Treasury Stock,Preferred 20,000 
D)  Treasury Stock,Preferred 16,000
Cash 16,000 
A)  Treasury Stock,Preferred 20,000
Cash 20,000 
B)  Cash 20,000
Treasury Stock,Preferred 16,000
Paid-in Capital,Treasury Stock 4,000 
C)  Cash 8,000
Retained Earnings 12,000
Treasury Stock,Preferred 20,000 
D)  Treasury Stock,Preferred 16,000
Cash 16,000

Question 3

The entry to close the Dividends account which has a balance of $10,000,at the end of an accounting period will be:

Accepted Answer

A)  Dividends 10,000
Cash 10,000 
B)  Retained Earnings 10,000
Cash 10,000 
C)  Dividends 10,000
Retained Earnings 10,000 
D)  Retained Earnings 10,000
Dividends 10,000 
A)  Dividends 10,000
Cash 10,000 
B)  Retained Earnings 10,000
Cash 10,000 
C)  Dividends 10,000
Retained Earnings 10,000 
D)  Retained Earnings 10,000
Dividends 10,000

Question 4

Book value per share refers to the

Accepted Answer

A)  net assets represented by one share of a company's stock. 
B)  highest price that investors will pay for a share of stock. 
C)  issue price of the stock,less any market decline since issuance. 
D)  par or stated value of a share of stock. 
A)  net assets represented by one share of a company's stock. 
B)  highest price that investors will pay for a share of stock. 
C)  issue price of the stock,less any market decline since issuance. 
D)  par or stated value of a share of stock.

Question 5

Match each definition with the correct term below.
-Book value

Accepted Answer

A) The maximum number of shares of stock that a corporation's state charter allows it to issue. 
B) A distribution among stockholders of the assets that a corporation's earnings have generated. 
C) A summary of the changes in the components of the stockholders' equity section of the balance sheet. 
D) A proportional distribution of shares among a corporation's shareholders. 
E) Stock that does not have a par value.
F)Represents a company's total assets minus its liabilities.
G)No-par stock that has a value assigned to it either by the board of directors or the state.
H)A dividend declared by a company that is in excess of its retained earnings.
I)The shares of stock that a corporation sells or otherwise transfers to stockholders.
J)When a corporation increases the number of shares of stock issued and outstanding and reduces the par or stated value proportionally. 
A) The maximum number of shares of stock that a corporation's state charter allows it to issue. 
B) A distribution among stockholders of the assets that a corporation's earnings have generated. 
C) A summary of the changes in the components of the stockholders' equity section of the balance sheet. 
D) A proportional distribution of shares among a corporation's shareholders. 
E) Stock that does not have a par value.
F)Represents a company's total assets minus its liabilities.
G)No-par stock that has a value assigned to it either by the board of directors or the state.
H)A dividend declared by a company that is in excess of its retained earnings.
I)The shares of stock that a corporation sells or otherwise transfers to stockholders.
J)When a corporation increases the number of shares of stock issued and outstanding and reduces the par or stated value proportionally.

Question 6

The net effects on a corporation of the declaration and payment of a cash dividend are to

Accepted Answer

A)  increase assets and increase stockholders' equity. 
B)  decrease liabilities and decrease stockholders' equity. 
C)  decrease assets and decrease stockholders' equity. 
D)  increase stockholders' equity and decrease liabilities. 
A)  increase assets and increase stockholders' equity. 
B)  decrease liabilities and decrease stockholders' equity. 
C)  decrease assets and decrease stockholders' equity. 
D)  increase stockholders' equity and decrease liabilities.

Question 7

The par value of stock is an arbitrary amount assigned to each share of stock.

Accepted Answer

A) True 
 B)False

Question 8

Start-up and organization costs should be amortized over ten years or more.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following transactions affects total retained earnings?

Accepted Answer

A)  Purchase of treasury stock 
B)  Payment of previously declared cash dividend 
C)  Declaration of a stock dividend 
D)  Declaration of a stock split 
A)  Purchase of treasury stock 
B)  Payment of previously declared cash dividend 
C)  Declaration of a stock dividend 
D)  Declaration of a stock split

Question 10

Match each definition with the correct term below.
-Stated value

Accepted Answer

A) The maximum number of shares of stock that a corporation's state charter allows it to issue. 
B) A distribution among stockholders of the assets that a corporation's earnings have generated. 
C) A summary of the changes in the components of the stockholders' equity section of the balance sheet. 
D) A proportional distribution of shares among a corporation's shareholders. 
E) Stock that does not have a par value.
F)Represents a company's total assets minus its liabilities.
G)No-par stock that has a value assigned to it either by the board of directors or the state.
H)A dividend declared by a company that is in excess of its retained earnings.
I)The shares of stock that a corporation sells or otherwise transfers to stockholders.
J)When a corporation increases the number of shares of stock issued and outstanding and reduces the par or stated value proportionally. 
A) The maximum number of shares of stock that a corporation's state charter allows it to issue. 
B) A distribution among stockholders of the assets that a corporation's earnings have generated. 
C) A summary of the changes in the components of the stockholders' equity section of the balance sheet. 
D) A proportional distribution of shares among a corporation's shareholders. 
E) Stock that does not have a par value.
F)Represents a company's total assets minus its liabilities.
G)No-par stock that has a value assigned to it either by the board of directors or the state.
H)A dividend declared by a company that is in excess of its retained earnings.
I)The shares of stock that a corporation sells or otherwise transfers to stockholders.
J)When a corporation increases the number of shares of stock issued and outstanding and reduces the par or stated value proportionally.

Question 11

The following amounts were reported by Ebert Corporation on December 31,2012:
   On January 3,2013,5,000 shares of treasury stock were sold.After the sale of the treasury shares,total stockholders' equity amounted to $277,500.No stockholders' equity transactions other than the sale of the treasury stock occurred between December 31,2012,and January 3,2013.From the information given,compute the selling price per share of the treasury stock.

Accepted Answer

$13.50 per share [27

Question 12

Dividends in arrears pertain to noncumulative preferred stock.

Accepted Answer

A) True 
 B)False

Question 13

Dividends on cumulative preferred stock become a liability of the corporation at the end of each year.

Accepted Answer

A) True 
 B)False

Question 14

The book value of one share of callable preferred stock is equal to the call value of the preferred share minus any dividends in arrears.

Accepted Answer

A) True 
 B)False

Question 15

On January 1,2013,Belmont Corporation had 50,000 shares of $10 par value common stock issued and outstanding.All 50,000 shares had been issued in a prior period at $15 per share.On February 1,2013,Belmont purchased 2,000 shares of treasury stock for $18 per share and later sold the treasury shares for $20 per share on March 2,2013.The entry to record the purchase of the treasury shares on February 1,2013,would be:

Accepted Answer

A)  Cash 36,000
Treasury Stock-Common 36,000 
B)  Cash 36,000
Treasury Stock-Common 30,000
Gain on Treasury Stock-Common 6,000 
C)  Treasury Stock,Common 30,000
Loss on Treasury Stock-Common 6,000
Cash 36,000 
D)  Treasury Stock,Common 36,000
Cash 36,000 
A)  Cash 36,000
Treasury Stock-Common 36,000 
B)  Cash 36,000
Treasury Stock-Common 30,000
Gain on Treasury Stock-Common 6,000 
C)  Treasury Stock,Common 30,000
Loss on Treasury Stock-Common 6,000
Cash 36,000 
D)  Treasury Stock,Common 36,000
Cash 36,000

Question 16

If Willis Corporation has 80,000 shares of common stock authorized,50,000 shares of common stock issued,and holds 12,000 shares of common stock as treasury stock,the total number of outstanding shares of Willis Corporation amounts to

Accepted Answer

A)  22,000. 
B)  68,000. 
C)  38,000. 
D)  26,000. 
A)  22,000. 
B)  68,000. 
C)  38,000. 
D)  26,000.

Question 17

When stock is issued for noncash assets or services,how does one place a valuation (dollar amount)on the transaction?

Accepted Answer

The transaction should be valu

Question 18

A stock dividend will cause a decrease in total contributed capital at the date the dividend is declared.

Accepted Answer

A) True 
 B)False

Question 19

Par value

Accepted Answer

A)  is established for a share of stock after it is issued. 
B)  is an arbitrary amount assigned to each share of stock. 
C)  represents what a share of stock is worth. 
D)  represents the current selling price for a share of stock. 
A)  is established for a share of stock after it is issued. 
B)  is an arbitrary amount assigned to each share of stock. 
C)  represents what a share of stock is worth. 
D)  represents the current selling price for a share of stock.

Question 20

When no-par common stock has a stated value,the stated value of the shares issued normally is not considered the legal capital of the corporation.

Accepted Answer

A) True 
 B)False

Draw two distinctions between accounting for a stock split and accounting for a stock dividend.

Use the following information to answer the question below. The following transactions involving Culbert Corporation occurred during the year: The entry to record the May 3 transaction would be:

The entry to close the Dividends account which has a balance of $10,000,at the end of an accounting period will be:

Book value per share refers to the

Match each definition with the correct term below. -Book value

The net effects on a corporation of the declaration and payment of a cash dividend are to

The par value of stock is an arbitrary amount assigned to each share of stock.

Start-up and organization costs should be amortized over ten years or more.

Which of the following transactions affects total retained earnings?

Match each definition with the correct term below. -Stated value

Dividends in arrears pertain to noncumulative preferred stock.

Dividends on cumulative preferred stock become a liability of the corporation at the end of each year.

The book value of one share of callable preferred stock is equal to the call value of the preferred share minus any dividends in arrears.

If Willis Corporation has 80,000 shares of common stock authorized,50,000 shares of common stock issued,and holds 12,000 shares of common stock as treasury stock,the total number of outstanding shares of Willis Corporation amounts to

When stock is issued for noncash assets or services,how does one place a valuation (dollar amount)on the transaction?

A stock dividend will cause a decrease in total contributed capital at the date the dividend is declared.

Par value

When no-par common stock has a stated value,the stated value of the shares issued normally is not considered the legal capital of the corporation.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters

Exam 12: Stockholders Equity

Draw two distinctions between accounting for a stock split and accounting for a stock dividend.

Use the following information to answer the question below. The following transactions involving Culbert Corporation occurred during the year: The entry to record the May 3 transaction would be:

The entry to close the Dividends account which has a balance of $10,000,at the end of an accounting period will be:

Book value per share refers to the

Match each definition with the correct term below. -Book value

The net effects on a corporation of the declaration and payment of a cash dividend are to

The par value of stock is an arbitrary amount assigned to each share of stock.

Start-up and organization costs should be amortized over ten years or more.

Which of the following transactions affects total retained earnings?

Match each definition with the correct term below. -Stated value

Dividends in arrears pertain to noncumulative preferred stock.

Dividends on cumulative preferred stock become a liability of the corporation at the end of each year.

The book value of one share of callable preferred stock is equal to the call value of the preferred share minus any dividends in arrears.

If Willis Corporation has 80,000 shares of common stock authorized,50,000 shares of common stock issued,and holds 12,000 shares of common stock as treasury stock,the total number of outstanding shares of Willis Corporation amounts to

When stock is issued for noncash assets or services,how does one place a valuation (dollar amount)on the transaction?

A stock dividend will cause a decrease in total contributed capital at the date the dividend is declared.

Par value

When no-par common stock has a stated value,the stated value of the shares issued normally is not considered the legal capital of the corporation.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters