At March 31, 2014, the Park Place Company shows the following data on their balance sheet: \[\begin{array} { | l | r | } \hline \text { Stockholders' equity } & \\ \hline \begin{array} { l } \text { Common stock, } \$ 1 \text { par, } 1,000,000 \text { shares } \\ \text { authorized, } \end{array} & \$ 120,000 \\ \hline \begin{array} { l } 120,000 \text { shares issued, } 110,000 \text { shares } \\ \text { butstanding } \end{array} & \\ \hline \text { Paid-in capital in excess of par } & 2,470,000 \\ \hline \text { Retained earnings } & 5,440,000 \\ \hline \text { Treasury stock, } 10,000 \text { shares at } \$ 25 & ( 250,000 )\\ \hline \text { Total stockholder's equity } & \$ 7,780,000 \\ \hline \end{array}\] - Assume Park Place purchases an additional 2,000 shares of treasury stock at $25 per share. Please restate the equity section of the balance sheet to properly reflect the transaction. \[\begin{array} { | l | l | l | } \hline \text { Stockholders' equity }\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad&\quad\quad\quad\quad &\quad\quad\quad \\ \hline & & \\ \hline & & \\ \hline\\ \hline & & \\ \hline\\ \hline \end{array}\]

\[\begin{array} { | l | r | } \hline \t

Ross Corporation reported the following equity section on its current balance sheet: \[\begin{array} { | l | r | } \hline \begin{array} { l } \text { Common stock, } \$ 5 \text { par, } 140,000 \text { shares authorized, } 50,000 \text { shares } \\ \text { issued } \end{array} & \$ 250,000 \\ \hline \text { Paid in capital in excess of par-common } & 200,000 \\ \hline \text { Retained earnings } & 207,000 \\ \hline \text { Total stockholders' equity } & \$ \underline { 657,000 } \\ \hline \end{array}\] - Which of the following would be included in the entry to record the corporation's purchase of 10,000 shares of its common stock for $7.50 per share?

A) Treasury stock would be debited for $75,000. B) Paid-in capital from treasury stock transactions would be credited for $70,000. C) Retained earnings would be debited for $75,000. D) Common stock would be credited for $50,000. A) Treasury stock would be debited for $75,000. B) Paid-in capital from treasury stock transactions would be credited for $70,000. C) Retained earnings would be debited for $75,000. D) Common stock would be credited for $50,000.

Ross Corporation reported the following equity section on its current balance sheet: \[\begin{array} { | l | r | } \hline \begin{array} { l } \text { Common stock, } \$ 5 \text { par, } 140,000 \text { shares authorized, } 50,000 \text { shares } \\ \text { issued } \end{array} & \$ 250,000 \\ \hline \text { Paid in capital in excess of par-common } & 200,000 \\ \hline \text { Retained earnings } & 207,000 \\ \hline \text { Total stockholders' equity } & \$ \underline { 657,000 } \\ \hline \end{array}\] - Which of the following would occur if the corporation purchased 15,000 shares of its common stock for $9.50 per share?

A) Stockholders' equity would increase by $142,500. B) Stockholders' equity would decrease by $75,000. C) Stockholders' equity would decrease by $142,500. D) Stockholders' equity would neither increase nor decrease. A) Stockholders' equity would increase by $142,500. B) Stockholders' equity would decrease by $75,000. C) Stockholders' equity would decrease by $142,500. D) Stockholders' equity would neither increase nor decrease.

On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet: $\begin{array}{|l|r|r|} \hline \text { Stockholders' equity } & & \\ \hline \text { Common stock, } \$ 1 \text { par } & 100,000 \text { shares authorized } &\$40,000 \\ \hline & 40,000 \text { shares issued } & \\ \hline \text { Paid-in capital in excess of par } & & 260,000 \\ \hline \text { Retained earnings } & & 940,000 \\ \hline \text { Total stockholder's equity } & & \$ 1,240,000 \\ \hline \end{array}$ On July 1, 2013, Stephans distributed a 5% stock dividend. The market value of the stock at that time was $13 per share. - Following this transaction, what would the new balance in Retained earnings be?

A) $916,000 B) $942,000 C) $966,000 D) $914,000 A) $916,000 B) $942,000 C) $966,000 D) $914,000

Exam 13: Corporations: Effects on Retained Earnings and the Income Statement

At March 31, 2014, the Park Place Company shows the following data on their balance sheet: Stockholders' equity Common stock, \ 1 par, 1,000,000 shares authorized, \ 120,000 120,000 shares issued, 110,000 shares butstanding Paid-in capital in excess of par 2,470,000 Retained earnings 5,440,000 Treasury stock, 10,000 shares at \ 25 (250,000) Total stockholder's equity \ 7,780,000 - Assume Park Place purchases an additional 2,000 shares of treasury stock at $25 per share. Please restate the equity section of the balance sheet to properly reflect the transaction. Stockholders' equity

(Essay)

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Question 21

For the year 2013, Foxmore Company reports the following items as part of their financial results: Sales revenues from regular business operations \ 3,000,000 Cost of goods sold 900,000 Operating expenses from their regular business operations 600,000 Gain on disposal of several items of property, plant \& equipment 15,000 Income tax expense on continuing operations 330,000 Loss on the termination of a discontinued business segment, net of Lax 120,000 Losses on damage caused by earthquake, net of tax 280,000 - How much is the income (loss) from continuing operations, before tax?

(Multiple Choice)

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Question 22

Qdot International originally issued common stock at a price of $20 per share. A year later, they distributed a 10% stock dividend to shareholders. At the time of the stock dividend, the share price had gone up to $24 per share. Under the rules of GAAP for stock dividends, Qdot will record neither a gain nor a loss on the stock dividend, despite the fact that the share price went up.

(True/False)

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Question 23

Ross Corporation reported the following equity section on its current balance sheet: Common stock, \ 5 par, 140,000 shares authorized, 50,000 shares issued \ 250,000 Paid in capital in excess of par-common 200,000 Retained earnings 207,000 Total stockholders' equity \ - Which of the following would be included in the entry to record the corporation's purchase of 10,000 shares of its common stock for $7.50 per share?

(Multiple Choice)

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Question 24

Please refer to the following information for Petra Sales Company: • Common stock, $1.00 par, 200,000 issued, 180,000 outstanding • Paid-in capital in excess of par: $1,600,000 • Retained earnings: $2,440,000 • Treasury stock: 20,000 shares purchased at $12 per share - If Petra Sales sells 10,000 shares of treasury stock at $14 per share, what amounts will be shown for the number of shares issued and outstanding?

(Multiple Choice)

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Question 25

Which of the following is a TRUE statement?

(Multiple Choice)

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Question 26

Rakish Co. purchases 3,500 shares of the company's $6 par common stock for $8/share. Journalize the transaction.

(Essay)

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Question 27

On March 1, 2014, Parkinson Company originally issued 10,000 shares of common stock at $4.00 per share. The stock had a par value of $0.01 per share. On March 1, 2015, Parkinson distributed a 12% stock dividend; the market price at that time had dropped to $3.75 per share. Which of the following statements is TRUE?

(Multiple Choice)

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Question 28

Ross Corporation reported the following equity section on its current balance sheet: Common stock, \ 5 par, 140,000 shares authorized, 50,000 shares issued \ 250,000 Paid in capital in excess of par-common 200,000 Retained earnings 207,000 Total stockholders' equity \ - Which of the following would occur if the corporation purchased 15,000 shares of its common stock for $9.50 per share?

(Multiple Choice)

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Question 29

Cash dividends affect only stockholders' equity accounts.

(True/False)

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Question 30

At January 1, 2014, Foxmore Company had 80,000 shares of common stock outstanding and no preferred stock. During the year, they issued 40,000 additional shares of common stock. At December 31, 2014, Foxmore had 120,000 shares of common stock outstanding, and no preferred stock. In addition, Foxmore reported the following results for the year 2014: Sales revenues from regular business operations \ 3,000,000 Cost of goods sold 900,000 Operating expenses from their regular business operations 600,000 Gain on disposal of several items of property, plant \& equipment 15,000 Income tax expense on continuing operations 330,000 Loss on the termination of a discontinued business segment, net of Lax 120,000 Losses on damage caused by earthquake, net of tax 280,000 - At December 31, 2014, how much is the earnings per share for income (loss) from continuing operations? (Please round all calculations to the nearest cent.)

(Multiple Choice)

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Question 31

A stock split is fundamentally the same transaction as a stock dividend.

(True/False)

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Question 32

Please refer to the following information for Petra Sales Company: • Common stock, $1.00 par, 200,000 issued, 180,000 outstanding • Paid-in capital in excess of par: $1,600,000 • Retained earnings: $2,440,000 • Treasury stock: 20,000 shares purchased at $12 per share - If Petra Sales purchases an additional 5,000 shares of treasury stock at $14 per share, what journal entry is required?

(Multiple Choice)

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Question 33

Companies usually report their retained earnings restrictions on the balance sheet.

(True/False)

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Question 34

What are the conditions that must be TRUE for an event to be considered extraordinary?

(Multiple Choice)

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Question 35

On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet: Stockholders' equity Common stock, \ 1 par 100,000 shares authorized \4 0,000 40,000 shares issued Paid-in capital in excess of par 260,000 Retained earnings 940,000 Total stockholder's equity \ 1,240,000 On July 1, 2013, Stephans distributed a 5% stock dividend. The market value of the stock at that time was $13 per share. - Following this transaction, what would the new balance in Retained earnings be?

(Multiple Choice)

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Question 36

On January 1, 2013, Parquet Sales issued 40,000 shares of common stock at a price of $22 per share. The stock has a par value of $1.00 per share. In mid-2014, due to dramatic increases in profits, the stock reached a market value of $90 per share. The board of directors approved a 2-for-1 stock split. After the stock split, what will the market value of the stock be?

(Multiple Choice)

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Question 37

The account to be debited when a stock dividend is declared and distributed on the same date would be:

(Multiple Choice)

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Question 38

Preferred Products started business on March 1, 2012, and issued 100,000 shares of $2 par value common stock at a market price of $50 per share. One year later, the share price had soared to $120. If Preferred Products does a 3-for-1 stock split, the market value of the stock will drop to $60 per share.

(True/False)

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Question 39

Which of the following BEST describes restrictions on cash dividends and treasury stock purchases?

(Multiple Choice)

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Question 40

Which of the following is a TRUE statement?

Rakish Co. purchases 3,500 shares of the company's $6 par common stock for $8/share. Journalize the transaction.

Cash dividends affect only stockholders' equity accounts.

A stock split is fundamentally the same transaction as a stock dividend.

Companies usually report their retained earnings restrictions on the balance sheet.

What are the conditions that must be TRUE for an event to be considered extraordinary?

The account to be debited when a stock dividend is declared and distributed on the same date would be:

Which of the following BEST describes restrictions on cash dividends and treasury stock purchases?

Corporations: Paid-In Capital and the Balance Sheet

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Management Accounting

Job Order and Process Costing

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

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