Question 1

Declaring and paying dividends causes a decrease in both assets and equity.

Accepted Answer

A) True 
 B)False

Question 2

Hot Tamale Company had $120,000 of Revenues and $125,000 of Expenses. No dividends were paid. Please provide the third of the year-end closing entries.
 $$\begin{array} { | l | l | l | } 
\hline \quad\quad\quad\quad\quad& \quad\quad&\quad\quad \
\hline & & \
\hline
\end{array}$$

Accepted Answer

Calculations: $125,

Question 3

Bradley Corporation issued 10,000 shares of common stock on January 1, 2013. The stock has par value of $0.01 per share and was sold at $25 per share. Please provide the journal entry for this transaction.
 $$\begin{array} { | l | l | l | } 
\hline \quad\quad\quad\quad\quad& \quad\quad&\quad\quad \
\hline & & \\hline & & \
\hline
\end{array}$$

Accepted Answer

This question is no

Question 4

Dallkin Corporation issued 5,000 shares of common stock on January 1, 2015. The stock has no par value and was sold at $18 per share. Please provide the journal entry for this transaction.
 $$\begin{array} { | l | l | l | } 
\hline \quad\quad\quad\quad\quad& \quad\quad&\quad\quad \
\hline & & \
\hline
\end{array}$$

Accepted Answer

This question is no

Question 5

Lerner Company had the following transactions in 2013, its first year of operations.
• Issued 20,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $14.00 per share.
• Issued 1,000 shares of $100 par value preferred stock. Shares were issued at par.
• Earned net income of $35,000.
• Paid no dividends.
The company charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock.
Please provide the stockholders' equity section of the balance sheet at December 31, 2013. Include information on par values, and the number of shares authorized and issued, where necessary. No subtotals are needed for total paid-in capital, but please show total stockholders' equity on the bottom line.
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Account } & \text { Par value info } & \text { Shares authorized } & \text { Shares issued } & \text { Balance } \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline
\end{array}$$

Accepted Answer

This question is not

Question 6

Please refer to the equity section of the balance sheet, below:
$\begin{array}{|l|l|}
\hline\text { Preferred stock, } \$ 50 \text { par, } 4 \% \text {, cumulative } & \$ 5,000 \
\hline 1,000 \text { shares authorized, } 100 \text { shares outstanding } & \
\hline \text { Common stock, } \$ 0.01 \text { par } & 120\\hline 1,000,000 \text { shares authorized, } 12,000 \text { shares outstanding } & \
\hline \text { Paid-in capital in exces of par } & 359,600 \
\hline \text { Retained earnings } & 153,280 \
\hline \text { Total stockholders' equity } & \$ 518,000\
\hline
\end{array}$
-
Assume there are no dividends in arrears. What is the book value per share of preferred stock?

Accepted Answer

A)  $50.00 per share 
B)  $42.75 per share 
C)  $52.00 per share 
D)  $41.00 per share 
A)  $50.00 per share 
B)  $42.75 per share 
C)  $52.00 per share 
D)  $41.00 per share

Question 7

Which of the following is TRUE about the date of record?

Accepted Answer

A)  On the date of record, the company issues new shares of stock. 
B)  On the date of record, the company disburses dividend payments to shareholders. 
C)  On the date of record, the company records the dividend payable amount. 
D)  On the date of record, the company determines who owns the shares of stock as of that date. 
A)  On the date of record, the company issues new shares of stock. 
B)  On the date of record, the company disburses dividend payments to shareholders. 
C)  On the date of record, the company records the dividend payable amount. 
D)  On the date of record, the company determines who owns the shares of stock as of that date.

Question 8

On November 1, 2014, Oster Company declared a dividend of $3.00 per share. Oster Company has 20,000 shares of common stock outstanding and no preferred stock. The date of record is November 15, and the payment date is November 30, 2014. 
- Which of the following is the journal entry needed on November 30?

Accepted Answer

A)  Debit Retained earnings $60,000 and credit Dividends payable $60,000. 
B)  Debit Dividends payable $60,000 and credit Cash $60,000. 
C)  Debit Cash $60,000 and credit Dividends payable $60,000. 
D)  Debit Retained earnings $60,000 and credit Cash $60,000. 
A)  Debit Retained earnings $60,000 and credit Dividends payable $60,000. 
B)  Debit Dividends payable $60,000 and credit Cash $60,000. 
C)  Debit Cash $60,000 and credit Dividends payable $60,000. 
D)  Debit Retained earnings $60,000 and credit Cash $60,000.

Question 9

A corporation has 10,000 shares of 10%, $50 par noncumulative preferred stock outstanding and 20,000 shares of no-par common stock outstanding. At the end of the current year, the corporation declares a dividend of $120,000.
What is the dividend per share for preferred shares and for common shares?

Accepted Answer

A)  The dividend per share is $5.00 to preferred shares and $3.50 to common shares. 
B)  The dividend per share is $6.67 to preferred shares and $1.50 to common shares. 
C)  The dividend per share is $1.00 to preferred shares and $6.75 to common shares. 
D)  The dividend per share is $50.00 to preferred shares and $1.00 to common shares. 
A)  The dividend per share is $5.00 to preferred shares and $3.50 to common shares. 
B)  The dividend per share is $6.67 to preferred shares and $1.50 to common shares. 
C)  The dividend per share is $1.00 to preferred shares and $6.75 to common shares. 
D)  The dividend per share is $50.00 to preferred shares and $1.00 to common shares.

Question 10

On November 1, 2014, Oster Company declared a dividend of $3.00 per share. Oster Company has 20,000 shares of common stock outstanding and no preferred stock. The date of record is November 15, and the payment date is November 30, 2014. 
-Which of the following statements is TRUE about the date of record?

Accepted Answer

A)  No journal entry is made on the date of record. 
B)  The liability must be recorded on the date of record. 
C)  Cash is disbursed to shareholders on the date of record. 
D)  The company transfers cash to a brokerage firm on the date of record. 
A)  No journal entry is made on the date of record. 
B)  The liability must be recorded on the date of record. 
C)  Cash is disbursed to shareholders on the date of record. 
D)  The company transfers cash to a brokerage firm on the date of record.

Question 11

Which of the following is an advantage of preferred stock?

Accepted Answer

A)  Preferred shareholders are guaranteed that they will not take a loss on their investment. 
B)  Preferred shareholders have higher voting rights than common shareholders. 
C)  Preferred shareholders may sell their shares for a price higher than that of common stock. 
D)  Preferred shareholders have the first claim on dividend funds. 
A)  Preferred shareholders are guaranteed that they will not take a loss on their investment. 
B)  Preferred shareholders have higher voting rights than common shareholders. 
C)  Preferred shareholders may sell their shares for a price higher than that of common stock. 
D)  Preferred shareholders have the first claim on dividend funds.

Question 12

Hot Tamale Company had $120,000 of revenues and $125,000 of expenses. No dividends were paid. The third of the year-end closing entries should include which of the following line items?

Accepted Answer

A)  Credit Retained earnings $5,000. 
B)  Debit Retained earnings $5,000. 
C)  Debit Income summary $5,000. 
D)  Credit Income summary $125,000. 
A)  Credit Retained earnings $5,000. 
B)  Debit Retained earnings $5,000. 
C)  Debit Income summary $5,000. 
D)  Credit Income summary $125,000.

Question 13

Bradley Corporation issued 10,000 shares of common stock on January 1, 2013. The stock has par value of $0.01 per share and was sold at par. Please provide the journal entry for this transaction.
 $$\begin{array} { | l | l | l | } 
\hline \quad\quad\quad\quad\quad& \quad\quad&\quad\quad \
\hline & & \
\hline
\end{array}$$

Accepted Answer

The answer of Bradley Corporation issued 10,000 shares of common...

Question 14

Stockholders of a corporation have unlimited liability for the corporation's debt.

Accepted Answer

A) True 
 B)False

Question 15

Ajax Company was founded in 2009. Its yearly earnings are shown here:
2012: Net income of $4,000
2013: Net income of $23,000
2014: Net income of $2,000
2015: Net loss of $30,000
No dividends were paid. At the end of the year 2015, Ajax would have a Retained earnings deficit of $1,000.

Accepted Answer

A) True 
 B)False

Question 16

Overton Company had the following transactions in 2013, its first year of operations.
• Issued 5,000 shares of common stock. Stock has par value of $0.01 per share and was issued at $30.00
per share.
• Earned net income of $200,000.
• Paid dividends of $5.00 per share.
The company charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock.
Please provide the stockholders' equity section of the balance sheet at December 31, 2013. Include information on par values, and the number of shares authorized and issued, where necessary. No subtotals are needed for total paid-in capital, but please show total stockholders' equity on the bottom line.
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Account } & \text { Par value info } & \text { Shares authorized } & \text { Shares issued } & \text { Balance } \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline
\end{array}$$

Accepted Answer

This question is not

Question 17

Which of the following represents one of the basic rights of stockholders?

Accepted Answer

A)  Stockholders may sell their stock back to the company if they wish. 
B)  Stockholders may authorize a business contract on behalf of the corporation. 
C)  Stockholders may determine at what price the company issues stock. 
D)  Stockholders may receive dividends from corporate earnings. 
A)  Stockholders may sell their stock back to the company if they wish. 
B)  Stockholders may authorize a business contract on behalf of the corporation. 
C)  Stockholders may determine at what price the company issues stock. 
D)  Stockholders may receive dividends from corporate earnings.

Question 18

Which of the following is the amount of stockholders' equity on the company's ledger for each share of stock?

Accepted Answer

A)  Book value 
B)  Market value 
C)  Liquidation value 
D)  Amortized value 
A)  Book value 
B)  Market value 
C)  Liquidation value 
D)  Amortized value

Question 19

On November 1, 2014, Oster Company declared a dividend of $3.00 per share. Oster Company has 20,000 shares of common stock outstanding and no preferred stock. Please provide the journal entry for the declaration of dividends.
 $$\begin{array} { | l | l | l | } 
\hline \quad\quad\quad\quad\quad& \quad\quad&\quad\quad \
\hline & & \
\hline
\end{array}$$

Accepted Answer

This question is no

Question 20

When a company records the year-end closing entries, the Income summary balance, before it is closed to Retained earnings, should be equal to the Net income or Net loss for the year.

Accepted Answer

A) True 
 B)False

Declaring and paying dividends causes a decrease in both assets and equity.

Hot Tamale Company had $120,000 of Revenues and $125,000 of Expenses. No dividends were paid. Please provide the third of the year-end closing entries.

Bradley Corporation issued 10,000 shares of common stock on January 1, 2013. The stock has par value of $0.01 per share and was sold at $25 per share. Please provide the journal entry for this transaction.

Dallkin Corporation issued 5,000 shares of common stock on January 1, 2015. The stock has no par value and was sold at $18 per share. Please provide the journal entry for this transaction.

Which of the following is TRUE about the date of record?

A corporation has 10,000 shares of 10%, $50 par noncumulative preferred stock outstanding and 20,000 shares of no-par common stock outstanding. At the end of the current year, the corporation declares a dividend of $120,000. What is the dividend per share for preferred shares and for common shares?

Which of the following is an advantage of preferred stock?

Hot Tamale Company had $120,000 of revenues and $125,000 of expenses. No dividends were paid. The third of the year-end closing entries should include which of the following line items?

Bradley Corporation issued 10,000 shares of common stock on January 1, 2013. The stock has par value of $0.01 per share and was sold at par. Please provide the journal entry for this transaction.

Stockholders of a corporation have unlimited liability for the corporation's debt.

Ajax Company was founded in 2009. Its yearly earnings are shown here: 2012: Net income of $4,000 2013: Net income of $23,000 2014: Net income of $2,000 2015: Net loss of $30,000 No dividends were paid. At the end of the year 2015, Ajax would have a Retained earnings deficit of $1,000.

Which of the following represents one of the basic rights of stockholders?

Which of the following is the amount of stockholders' equity on the company's ledger for each share of stock?

On November 1, 2014, Oster Company declared a dividend of $3.00 per share. Oster Company has 20,000 shares of common stock outstanding and no preferred stock. Please provide the journal entry for the declaration of dividends.

When a company records the year-end closing entries, the Income summary balance, before it is closed to Retained earnings, should be equal to the Net income or Net loss for the year.

Corporations: Effects on Retained Earnings and the Income Statement

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

Filters

Exam 12: Corporations: Paid-In Capital and the Balance Sheet

Declaring and paying dividends causes a decrease in both assets and equity.

Hot Tamale Company had $120,000 of Revenues and $125,000 of Expenses. No dividends were paid. Please provide the third of the year-end closing entries.

Bradley Corporation issued 10,000 shares of common stock on January 1, 2013. The stock has par value of $0.01 per share and was sold at $25 per share. Please provide the journal entry for this transaction.

Dallkin Corporation issued 5,000 shares of common stock on January 1, 2015. The stock has no par value and was sold at $18 per share. Please provide the journal entry for this transaction.

Which of the following is TRUE about the date of record?

A corporation has 10,000 shares of 10%, $50 par noncumulative preferred stock outstanding and 20,000 shares of no-par common stock outstanding. At the end of the current year, the corporation declares a dividend of $120,000. What is the dividend per share for preferred shares and for common shares?

Which of the following is an advantage of preferred stock?

Hot Tamale Company had $120,000 of revenues and $125,000 of expenses. No dividends were paid. The third of the year-end closing entries should include which of the following line items?

Bradley Corporation issued 10,000 shares of common stock on January 1, 2013. The stock has par value of $0.01 per share and was sold at par. Please provide the journal entry for this transaction.

Stockholders of a corporation have unlimited liability for the corporation's debt.

Ajax Company was founded in 2009. Its yearly earnings are shown here: 2012: Net income of $4,000 2013: Net income of $23,000 2014: Net income of $2,000 2015: Net loss of $30,000 No dividends were paid. At the end of the year 2015, Ajax would have a Retained earnings deficit of $1,000.

Which of the following represents one of the basic rights of stockholders?

Which of the following is the amount of stockholders' equity on the company's ledger for each share of stock?

On November 1, 2014, Oster Company declared a dividend of $3.00 per share. Oster Company has 20,000 shares of common stock outstanding and no preferred stock. Please provide the journal entry for the declaration of dividends.

When a company records the year-end closing entries, the Income summary balance, before it is closed to Retained earnings, should be equal to the Net income or Net loss for the year.

Corporations: Effects on Retained Earnings and the Income Statement

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

Filters