Question 1

The authorized stock of a corporation

Accepted Answer

A) must be recorded in a formal accounting entry 
B) only reflects the initial capital needs of the company 
C) is indicated in its by-laws 
D) is indicated in its charter 
A) must be recorded in a formal accounting entry 
B) only reflects the initial capital needs of the company 
C) is indicated in its by-laws 
D) is indicated in its charter

Question 2

If 20,000 shares are authorized,15,000 shares are issued,and 500 shares are held as treasury stock,a cash dividend of $1 per share would amount to $15,000.

Accepted Answer

A) True 
 B)False

Question 3

When a corporation issues stock at a premium,it reports the premium as an other income item on the income statement.

Accepted Answer

A) True 
 B)False

Question 4

The financial loss that each stockholder in a corporation can incur is usually limited to the amount invested by the stockholder.

Accepted Answer

A) True 
 B)False

Question 5

On February 1,Marine Company reacquired 7,500 shares of its common stock at $30 per share.On March 15,Marine sold 4,500 of the reacquired shares at $34 per share.On June 2,Marine sold the remaining shares at $28 per share.
Journalize the transaction of February 1,March 15,and June 2.

Accepted Answer

None

Question 6

The Dayton Corporation began the current year with a retained earnings balance of $32,000.During the year,the company corrected an error made in the prior year,which was a failure to record depreciation expense of $3,000 on equipment.Also,during the current year,the company earned net income of $12,000 and declared cash dividends of $7,000.Compute the year-end retained earnings balance.

Accepted Answer

A) $34,000 
B) $37,000 
C) $41,000 
D) $44,000 
A) $34,000 
B) $37,000 
C) $41,000 
D) $44,000

Question 7

Treasury stock shares are

Accepted Answer

A) shares held by the U.S.Treasury Department 
B) part of the total outstanding shares but not part of the total issued shares of a corporation 
C) unissued shares that are held by the treasurer of the corporation 
D) issued shares that have been reacquired by a corporation 
A) shares held by the U.S.Treasury Department 
B) part of the total outstanding shares but not part of the total issued shares of a corporation 
C) unissued shares that are held by the treasurer of the corporation 
D) issued shares that have been reacquired by a corporation

Question 8

The day on which the board of directors of the corporation distributes a dividend is called the declaration date.

Accepted Answer

A) True 
 B)False

Question 9

One of the prerequisites to paying a cash dividend is sufficient retained earnings.

Accepted Answer

A) True 
 B)False

Question 10

Indicate whether the following actions would + increase,- decrease,or 0 not affect a company's total assets,liabilities,and stockholders' equity.

Accepted Answer

None

Question 11

A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8.Subsequently,the company declared a 2% stock dividend on a date when the market price was $11 a share.What is the amount transferred from the retained earnings account to paid-in capital accounts as a result of the stock dividend?

Accepted Answer

A) $3,200 
B) $6,400 
C) $4,800 
D) $8,800 
A) $3,200 
B) $6,400 
C) $4,800 
D) $8,800

Question 12

Big Bluestem Inc.reported the following results for the year ending April 30:
 $\begin{array}{lr}
\text { Retained earnings, May } 1 & \$ 3,750,000 \
\text { Net income } & 720,000 \
\text { Cash dividends declared } & 80,000 \
\text { Stock dividends declared } & 220,000
\end{array}$

Prepare a retained earnings statement for the fiscal year ended April 30.

Accepted Answer

None

Question 13

What is the total stockholders' equity based on the following data?

Accepted Answer

A) $1,095,000 
B) $1,151,000 
C) $1,039,000 
D) $679,000 
A) $1,095,000 
B) $1,151,000 
C) $1,039,000 
D) $679,000

Question 14

The main source of paid-in capital is from issuing stock.

Accepted Answer

A) True 
 B)False

Question 15

When no-par stock is issued,Common Stock is credited for the selling price of the stock issued.

Accepted Answer

A) True 
 B)False

Question 16

The cost method of accounting for the purchase and sale of treasury stock is a commonly used method.

Accepted Answer

A) True 
 B)False

Question 17

A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8.Subsequently,the company declared a 4% stock dividend on a date when the market price was $12 a share.What is the amount transferred from the retained earnings account to paid-in capital accounts as a result of the stock dividend?

Accepted Answer

A) $12,800 
B) $19,200 
C) $32,000 
D) $48,800 
A) $12,800 
B) $19,200 
C) $32,000 
D) $48,800

Question 18

The excess of issue price over par of common stock is termed an

Accepted Answer

A) discount 
B) income 
C) deficit 
D) premium 
A) discount 
B) income 
C) deficit 
D) premium

Question 19

On March 4 of the current year, Barefoot Bay, Inc. reacquired 5,000 shares of its common stock at $89 per share.  On August 7, Barefoot Bay sold 3,500 of the reacquired shares at $100 per share. The remaining 1,500 shares were sold at $88 per share on November 29.

a.	Journalize the transaction of March 4, August 7, and November 29.
b.	What is the balance in Paid-in Capital from Sale of Treasury Stock on December 31 of the current year?
c.	Why might Barefoot Bay Inc. have purchased the treasury stock?

Accepted Answer

11ed7472_a7a2_eeb1_846d_77739537567d_7773

Question 20

Significant changes in stockholders' equity are reported in

Accepted Answer

A) income statement 
B) retained earnings statement 
C) statement of stockholders' equity 
D) statement of cash flows 
A) income statement 
B) retained earnings statement 
C) statement of stockholders' equity 
D) statement of cash flows

The authorized stock of a corporation

If 20,000 shares are authorized,15,000 shares are issued,and 500 shares are held as treasury stock,a cash dividend of $1 per share would amount to $15,000.

When a corporation issues stock at a premium,it reports the premium as an other income item on the income statement.

The financial loss that each stockholder in a corporation can incur is usually limited to the amount invested by the stockholder.

On February 1,Marine Company reacquired 7,500 shares of its common stock at $30 per share.On March 15,Marine sold 4,500 of the reacquired shares at $34 per share.On June 2,Marine sold the remaining shares at $28 per share. Journalize the transaction of February 1,March 15,and June 2.

Treasury stock shares are

The day on which the board of directors of the corporation distributes a dividend is called the declaration date.

One of the prerequisites to paying a cash dividend is sufficient retained earnings.

Indicate whether the following actions would + increase,- decrease,or 0 not affect a company's total assets,liabilities,and stockholders' equity.

Big Bluestem Inc.reported the following results for the year ending April 30: Retained earnings, May 1 \ 3,750,000 Net income 720,000 Cash dividends declared 80,000 Stock dividends declared 220,000 Prepare a retained earnings statement for the fiscal year ended April 30.

What is the total stockholders' equity based on the following data?

The main source of paid-in capital is from issuing stock.

When no-par stock is issued,Common Stock is credited for the selling price of the stock issued.

The cost method of accounting for the purchase and sale of treasury stock is a commonly used method.

The excess of issue price over par of common stock is termed an

Significant changes in stockholders' equity are reported in

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley,internal Control,and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 11: Corporations: Organization,stock Transactions,and Dividends

The authorized stock of a corporation

If 20,000 shares are authorized,15,000 shares are issued,and 500 shares are held as treasury stock,a cash dividend of $1 per share would amount to $15,000.

When a corporation issues stock at a premium,it reports the premium as an other income item on the income statement.

The financial loss that each stockholder in a corporation can incur is usually limited to the amount invested by the stockholder.

On February 1,Marine Company reacquired 7,500 shares of its common stock at $30 per share.On March 15,Marine sold 4,500 of the reacquired shares at $34 per share.On June 2,Marine sold the remaining shares at $28 per share. Journalize the transaction of February 1,March 15,and June 2.

Treasury stock shares are

The day on which the board of directors of the corporation distributes a dividend is called the declaration date.

One of the prerequisites to paying a cash dividend is sufficient retained earnings.

Indicate whether the following actions would + increase,- decrease,or 0 not affect a company's total assets,liabilities,and stockholders' equity.

Big Bluestem Inc.reported the following results for the year ending April 30: Retained earnings, May 1 \ 3,750,000 Net income 720,000 Cash dividends declared 80,000 Stock dividends declared 220,000 Prepare a retained earnings statement for the fiscal year ended April 30.

What is the total stockholders' equity based on the following data?

The main source of paid-in capital is from issuing stock.

When no-par stock is issued,Common Stock is credited for the selling price of the stock issued.

The cost method of accounting for the purchase and sale of treasury stock is a commonly used method.

The excess of issue price over par of common stock is termed an

Significant changes in stockholders' equity are reported in

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley,internal Control,and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters