Question 1

The disclosures for stockholders' equity must include the pertinent rights and privileges of the various securities outstanding.

Accepted Answer

A) True 
 B)False

Question 2

Retained earnings are amounts invested by the equity holders of the company.

Accepted Answer

A) True 
 B)False

Question 3

When accounting for non-mandatorily redeemable preferred shares,________ will separate out the debt features and report them as a liability.

Accepted Answer

A) IFRS 
B) U)S.GAAP 
C) Both A & B 
D) Neither A nor B 
A) IFRS 
B) U)S.GAAP 
C) Both A & B 
D) Neither A nor B

Question 4

The two methods of accounting for treasury stock are the cost method and the fair value method.

Accepted Answer

A) True 
 B)False

Question 5

Stock issue costs are treated as a(n)________.

Accepted Answer

A) addition to the common stock account 
B) reduction of additional paid-in-capital 
C) increase in outstanding shares 
D) decrease in treasury stock 
A) addition to the common stock account 
B) reduction of additional paid-in-capital 
C) increase in outstanding shares 
D) decrease in treasury stock

Question 6

Archer,Inc.declared a stock dividend of 100,000 shares.Prior to the declaration,the company has 450,000 shares,$1 par value common stock issued and outstanding.At the date of the declaration,the company's common stock was selling for $15 per share.
Prepare the required journal entries to account for the declaration as if the 100,000 shares were considered:
a.a small stock dividend
b.a large stock dividend

Accepted Answer

a.Small Stock Divide

Question 7

Renoir Corporation reacquired 33,000 shares of its common stock for $16 per share on July 1.On August 1 they sold 6,000 shares for $21 per share.What is the necessary journal entry for the August transaction?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 8

When a company has unusually high or low net income,the ________ is not the most useful valuation ratio.

Accepted Answer

A) Current Ratio 
B) Price to Earnings Ratio 
C) Quick Ratio 
D) Price to Book Ratio 
A) Current Ratio 
B) Price to Earnings Ratio 
C) Quick Ratio 
D) Price to Book Ratio

Question 9

TLR Productions issued 800 shares of its $2 par value common stock for $10 per share.What amount would they record as additional paid-in-capital?

Accepted Answer

A) $800 
B) $1,600 
C) $6,400 
D) $8,000 
A) $800 
B) $1,600 
C) $6,400 
D) $8,000

Question 10

Woods,Inc.issued 100 shares of its $5 par value common stock for $15 per share.They will record ________ in the common stock account at par value and ________ as additional paid-in-capital.

Accepted Answer

A) $500; $1,000 
B) $500; $1,500 
C) $1,000; $500 
D) $1,500; $500 
A) $500; $1,000 
B) $500; $1,500 
C) $1,000; $500 
D) $1,500; $500

Question 11

Comprehensive income includes all changes in equity during a period from all sources.

Accepted Answer

A) True 
 B)False

Question 12

The two major components of comprehensive income are ________ and ________.

Accepted Answer

A) stockholders' equity; retained earnings 
B) net income; other comprehensive income 
C) retained earnings; net income 
D) dividends; prior-period adjustments 
A) stockholders' equity; retained earnings 
B) net income; other comprehensive income 
C) retained earnings; net income 
D) dividends; prior-period adjustments

Question 13

TLR Productions hires a consultant for a new project,and issues common stock with a par value of $700 in exchange for consulting services received.The common stock has a fair value of $2,800.What is the journal entry required to record this transaction?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 14

On January 1,2013,Warhol Company issued 1,000 shares of 10%,$100 par value,cumulative preferred stock for $100,000.On December 30,2015,the Board declared dividends of $20 per share on the preferred stock.What journal entry is necessary for the declaration of dividends?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 15

Coyote Company reacquired 25,000 shares of its common stock for $15 per share on June 1.On July 1 they sold 10,000 shares for $20 per share.On August 1 they sold 5,000 shares for $12 per share.Prepare the necessary journal entries (omit explanations).

Accepted Answer

The answer of Coyote Company reacquired 25,000 shares of its...

Question 16

Price Co.reported net income of $12,000 for the current year.It had unrealized losses on available-for-sale securities of $1,200 after tax,and a foreign currency translation loss of $500 after tax.What is the comprehensive income for the current year?

Accepted Answer

A) $12,500 
B) $11,300 
C) $10,300 
D) $11,500 
A) $12,500 
B) $11,300 
C) $10,300 
D) $11,500

Question 17

Danio Fisheries issued 200,000 shares of $2 par value stock.On August 1,Danio Fisheries implements a two-for-one stock split.After the stock split,the total number of shares outstanding is ________ and the total par value is ________.

Accepted Answer

A) 400,000; $400,000 
B) 100,000; $400,000 
C) 400,000; $800,000 
D) 200,000; $800,000 
A) 400,000; $400,000 
B) 100,000; $400,000 
C) 400,000; $800,000 
D) 200,000; $800,000

Question 18

Molly's Brewery declared a cash dividend of $2,400 on July 1,2015.It sets the record date as July 17,2015,the ex-dividend date as July 15,2015,and the payment date as August 5,2015.Prepare all necessary journal entries to record this dividend.

Accepted Answer

The answer of Molly's Brewery declared a cash dividend of...

Question 19

Under U.S.GAAP,________ preferred shares are classified as a liability.

Accepted Answer

A) convertible 
B) callable 
C) mandatorily redeemable 
D) non-mandatorily redeemable 
A) convertible 
B) callable 
C) mandatorily redeemable 
D) non-mandatorily redeemable

Question 20

Treasury shares reduce the number of shares ________.

Accepted Answer

A) issued 
B) authorized 
C) outstanding 
D) available 
A) issued 
B) authorized 
C) outstanding 
D) available

Exam 17: Accounting for Stockholders Equity

The disclosures for stockholders' equity must include the pertinent rights and privileges of the various securities outstanding.

Retained earnings are amounts invested by the equity holders of the company.

When accounting for non-mandatorily redeemable preferred shares,________ will separate out the debt features and report them as a liability.

The two methods of accounting for treasury stock are the cost method and the fair value method.

Stock issue costs are treated as a(n)________.

Renoir Corporation reacquired 33,000 shares of its common stock for $16 per share on July 1.On August 1 they sold 6,000 shares for $21 per share.What is the necessary journal entry for the August transaction?

When a company has unusually high or low net income,the ________ is not the most useful valuation ratio.

TLR Productions issued 800 shares of its $2 par value common stock for $10 per share.What amount would they record as additional paid-in-capital?

Woods,Inc.issued 100 shares of its $5 par value common stock for $15 per share.They will record ________ in the common stock account at par value and ________ as additional paid-in-capital.

Comprehensive income includes all changes in equity during a period from all sources.

The two major components of comprehensive income are ________ and ________.

TLR Productions hires a consultant for a new project,and issues common stock with a par value of $700 in exchange for consulting services received.The common stock has a fair value of $2,800.What is the journal entry required to record this transaction?

On January 1,2013,Warhol Company issued 1,000 shares of 10%,$100 par value,cumulative preferred stock for $100,000.On December 30,2015,the Board declared dividends of $20 per share on the preferred stock.What journal entry is necessary for the declaration of dividends?

Coyote Company reacquired 25,000 shares of its common stock for $15 per share on June 1.On July 1 they sold 10,000 shares for $20 per share.On August 1 they sold 5,000 shares for $12 per share.Prepare the necessary journal entries (omit explanations).

Price Co.reported net income of $12,000 for the current year.It had unrealized losses on available-for-sale securities of $1,200 after tax,and a foreign currency translation loss of $500 after tax.What is the comprehensive income for the current year?

Danio Fisheries issued 200,000 shares of $2 par value stock.On August 1,Danio Fisheries implements a two-for-one stock split.After the stock split,the total number of shares outstanding is ________ and the total par value is ________.

Molly's Brewery declared a cash dividend of $2,400 on July 1,2015.It sets the record date as July 17,2015,the ex-dividend date as July 15,2015,and the payment date as August 5,2015.Prepare all necessary journal entries to record this dividend.

Under U.S.GAAP,________ preferred shares are classified as a liability.

Treasury shares reduce the number of shares ________.

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

OL: Revenue Recognition

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Acquisition, cost Allocation, and Derecognition

Long-Term Operating Assets: Departures From Historical Cost

Operating Liabilities and Contingencies

OL: Operating Liabilities and Contingencies

Financing Liabilities

Investing Assets

Accounting for Income Taxes

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

Filters

Woods,Inc.issued 100 shares of its $5 par value common stock for $15 per share.They will record in the common stock account at par value and as additional paid-in-capital.

The two major components of comprehensive income are and .

Danio Fisheries issued 200,000 shares of $2 par value stock.On August 1,Danio Fisheries implements a two-for-one stock split.After the stock split,the total number of shares outstanding is and the total par value is .