Question 1

Par value is the minimum cushion of capital established for the protection of

Accepted Answer

A)  investors (stockholders). 
B)  management. 
C)  creditors. 
D)  all of these. 
A)  investors (stockholders). 
B)  management. 
C)  creditors. 
D)  all of these.

Question 2

Which of the following statements is true of stock option plans?

Accepted Answer

A)  They give employees the right to purchase stock in the company at a fixed price on a future date. 
B)  They are not a form of motivating employees. 
C)  The compensation expense from stock option plans is not tax deductible. 
D)  They must be offered to all employees. 
A)  They give employees the right to purchase stock in the company at a fixed price on a future date. 
B)  They are not a form of motivating employees. 
C)  The compensation expense from stock option plans is not tax deductible. 
D)  They must be offered to all employees.

Question 3

Use the following information to answer the question below. On January 1,2013,Falcon Corporation had 40,000 shares of $10 par value common stock issued and outstanding.All 40,000 shares had been issued in a prior period at $17 per share.On February 1,2013,Falcon purchased 6,100 shares of treasury stock for $19 per share and later sold the treasury shares for $26 per share on March 2,2013.
What amount of gain due to these treasury stock transactions should be reported on the income statement for the year ended December 31,2013?

Accepted Answer

A)  $0 
B)  $42,700 
C)  $6,100 
D)  $4,270 
A)  $0 
B)  $42,700 
C)  $6,100 
D)  $4,270

Question 4

Match each definition with the correct term below.
-No-par stock

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 5

A 3-for-1 stock split will have the same effect on the number of shares outstanding as a 300 percent stock dividend.

Accepted Answer

A) True 
 B)False

Question 6

The company issued 7,000 shares of stock in exchange for equipment that had a fair market value of $320,000. The entry to record transaction 2 would be:

Accepted Answer

A)  Cash 400,000
Common Stock 400,000 
B)  Cash 400,000
Common Stock 320,000
Additional Paid-in Capital 80,000 
C)  Cash 320,000
Additional Paid-in Capital 80,000
Common Stock 400,000 
D)  Cash 320,000
Common Stock 320,000 
A)  Cash 400,000
Common Stock 400,000 
B)  Cash 400,000
Common Stock 320,000
Additional Paid-in Capital 80,000 
C)  Cash 320,000
Additional Paid-in Capital 80,000
Common Stock 400,000 
D)  Cash 320,000
Common Stock 320,000

Question 7

Define outstanding stock.

Accepted Answer

Outstanding stock is stock tha

Question 8

Tallapoosa Corporation has total contributed capital of $300,000 and retained earnings of $170,000.It has 1,000 shares of $50 par value preferred stock with no dividends in arrears and 5,000 shares of $50 par value common stock.The preferred stock is callable at 105.The book value of each share of common stock is

Accepted Answer

A)  $84.00. 
B)  $46.50. 
C)  $83.50. 
D)  $94.00. 
A)  $84.00. 
B)  $46.50. 
C)  $83.50. 
D)  $94.00.

Question 9

Walker Corporation has 40,000 shares of $20 par value common stock outstanding.Prepare entries in journal form without explanations for the following transactions.(Market value of the stock was $30.00 on December 16 and $31.00 on December 23.)

Accepted Answer

The answer of Walker Corporation has 40,000 shares of $20...

Question 10

Holders of common stock must be made aware of possible restrictions on common dividends when the preferred stock is

Accepted Answer

A)  convertible. 
B)  cumulative. 
C)  callable. 
D)  noncumulative. 
A)  convertible. 
B)  cumulative. 
C)  callable. 
D)  noncumulative.

Question 11

The limited liability of a stockholder can be viewed as both an advantage and a disadvantage.

Accepted Answer

A) True 
 B)False

Question 12

The entry required to record start-up and organization costs will cause a decrease in net income for the period.

Accepted Answer

A) True 
 B)False

Question 13

Convertible preferred stock is preferred stock that may be exchanged for

Accepted Answer

A)  cash at the option of the corporation. 
B)  common stock at the option of the corporation. 
C)  cash at the option of the stockholder. 
D)  common stock at the option of the stockholder. 
A)  cash at the option of the corporation. 
B)  common stock at the option of the corporation. 
C)  cash at the option of the stockholder. 
D)  common stock at the option of the stockholder.

Question 14

Tallaposa Corporation issued 4,000 shares of its $20 par value common stock for some land.The land had a fair market value of $120,000.
Prepare the entries in journal form necessary to record the stock issue for the land under each of the following conditions: 
a.The stock was selling for $28 per share on the day of the transaction.
b.Management attempted to place a market value on the common stock but could not do so.

Accepted Answer

The answer of Tallaposa Corporation issued 4,000 shares of its...

Question 15

On May 1,2013,Monroe Corporation had 200,000 shares of $200 par value common stock outstanding with a market value of $320 per share.On May 2,2013,Monroe announced a 4-for-1 stock split.After the split,the par value of the stock

Accepted Answer

A)  remained the same as before the split. 
B)  was reduced to $50 per share. 
C)  was reduced by $80 per share. 
D)  was reduced by $50 per share. 
A)  remained the same as before the split. 
B)  was reduced to $50 per share. 
C)  was reduced by $80 per share. 
D)  was reduced by $50 per share.

Question 16

The declaration of a cash dividend causes an increase in a corporation's liabilities at the date of record.

Accepted Answer

A) True 
 B)False

Question 17

modified
Prepare entries in journal form without explanations to record the following transactions involving Dailey Corporation's $10 par value common stock:

Accepted Answer

The answer of modified
Prepare entries in journal form without explanations...

Question 18

Which of the following phrases is not descriptive of the corporate form of business?

Accepted Answer

A)  Professional management 
B)  Continuous existence 
C)  Limited liability 
D)  Single taxation 
A)  Professional management 
B)  Continuous existence 
C)  Limited liability 
D)  Single taxation

Question 19

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 sale of the treasury shares on March 2,2013,would be:

Accepted Answer

A)  Cash 40,000
Treasury Stock-Common 40,000 
B)  Cash 40,000
Treasury Stock-Common 36,000
Paid-in Capital,Treasury Stock 4,000 
C)  Cash 40,000
Treasury Stock-Common 36,000
Retained Earnings 4,000 
D)  Cash 40,000
Treasury Stock-Common 36,000
Gain on Treasury Stock 4,000 
A)  Cash 40,000
Treasury Stock-Common 40,000 
B)  Cash 40,000
Treasury Stock-Common 36,000
Paid-in Capital,Treasury Stock 4,000 
C)  Cash 40,000
Treasury Stock-Common 36,000
Retained Earnings 4,000 
D)  Cash 40,000
Treasury Stock-Common 36,000
Gain on Treasury Stock 4,000

Question 20

A corporation should account for the declaration of a 10 percent stock dividend by

Accepted Answer

A)  transferring from retained earnings to contributed capital an amount equal to the legal capital represented by the dividend shares. 
B)  transferring from retained earnings to contributed capital an amount equal to the market value of the dividend shares. 
C)  transferring from retained earnings to contributed capital whatever amount the board of directors deems appropriate. 
D)  making only a memorandum entry in the general journal. 
A)  transferring from retained earnings to contributed capital an amount equal to the legal capital represented by the dividend shares. 
B)  transferring from retained earnings to contributed capital an amount equal to the market value of the dividend shares. 
C)  transferring from retained earnings to contributed capital whatever amount the board of directors deems appropriate. 
D)  making only a memorandum entry in the general journal.

Par value is the minimum cushion of capital established for the protection of

Which of the following statements is true of stock option plans?

Match each definition with the correct term below. -No-par stock

A 3-for-1 stock split will have the same effect on the number of shares outstanding as a 300 percent stock dividend.

The company issued 7,000 shares of stock in exchange for equipment that had a fair market value of $320,000. The entry to record transaction 2 would be:

Define outstanding stock.

Walker Corporation has 40,000 shares of $20 par value common stock outstanding.Prepare entries in journal form without explanations for the following transactions.(Market value of the stock was $30.00 on December 16 and $31.00 on December 23.)

Holders of common stock must be made aware of possible restrictions on common dividends when the preferred stock is

The limited liability of a stockholder can be viewed as both an advantage and a disadvantage.

The entry required to record start-up and organization costs will cause a decrease in net income for the period.

Convertible preferred stock is preferred stock that may be exchanged for

On May 1,2013,Monroe Corporation had 200,000 shares of $200 par value common stock outstanding with a market value of $320 per share.On May 2,2013,Monroe announced a 4-for-1 stock split.After the split,the par value of the stock

The declaration of a cash dividend causes an increase in a corporation's liabilities at the date of record.

modified Prepare entries in journal form without explanations to record the following transactions involving Dailey Corporation's $10 par value common stock:

Which of the following phrases is not descriptive of the corporate form of business?

A corporation should account for the declaration of a 10 percent stock dividend by

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

Par value is the minimum cushion of capital established for the protection of

Which of the following statements is true of stock option plans?

Match each definition with the correct term below. -No-par stock

A 3-for-1 stock split will have the same effect on the number of shares outstanding as a 300 percent stock dividend.

The company issued 7,000 shares of stock in exchange for equipment that had a fair market value of $320,000. The entry to record transaction 2 would be:

Define outstanding stock.

Walker Corporation has 40,000 shares of $20 par value common stock outstanding.Prepare entries in journal form without explanations for the following transactions.(Market value of the stock was $30.00 on December 16 and $31.00 on December 23.)

Holders of common stock must be made aware of possible restrictions on common dividends when the preferred stock is

The limited liability of a stockholder can be viewed as both an advantage and a disadvantage.

The entry required to record start-up and organization costs will cause a decrease in net income for the period.

Convertible preferred stock is preferred stock that may be exchanged for

On May 1,2013,Monroe Corporation had 200,000 shares of $200 par value common stock outstanding with a market value of $320 per share.On May 2,2013,Monroe announced a 4-for-1 stock split.After the split,the par value of the stock

The declaration of a cash dividend causes an increase in a corporation's liabilities at the date of record.

modified Prepare entries in journal form without explanations to record the following transactions involving Dailey Corporation's $10 par value common stock:

Which of the following phrases is not descriptive of the corporate form of business?

A corporation should account for the declaration of a 10 percent stock dividend by

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