Question 1

Common Stock Dividend Distributable is an equity account.

Accepted Answer

A) True 
 B)False

Question 2

Hutter Corporation declared a $0.50 per share cash dividend on its common shares.The company has 20,000 shares authorized,9,000 shares issued,and 8,000 shares of common stock outstanding.The journal entry to record the dividend declaration is:

Accepted Answer

A) Debit Retained Earnings $4,000; credit Common Dividends Payable $4,000. 
B) Debit Common Dividends Payable $4,000; credit Cash $4,000. 
C) Debit Retained Earnings $4,500; credit Common Dividends Payable $4,500. 
D) Debit Common Dividends Payable $4,500; credit Cash $4,500. 
E) Debit Retained Earnings $10,000; credit Common Dividends Payable $10,000. 
A) Debit Retained Earnings $4,000; credit Common Dividends Payable $4,000. 
B) Debit Common Dividends Payable $4,000; credit Cash $4,000. 
C) Debit Retained Earnings $4,500; credit Common Dividends Payable $4,500. 
D) Debit Common Dividends Payable $4,500; credit Cash $4,500. 
E) Debit Retained Earnings $10,000; credit Common Dividends Payable $10,000.

Question 3

Mayan Company had net income of $132,000.The weighted-average common shares outstanding were 80,000.The company declared a $27,000 dividend on its noncumulative,nonparticipating preferred stock.There were no other stock transactions.The company's earnings per share is:

Accepted Answer

A) $1.65. 
B) $1.99. 
C) $1.31. 
D) $0.34. 
E) $4.89. 
A) $1.65. 
B) $1.99. 
C) $1.31. 
D) $0.34. 
E) $4.89.

Question 4

Paid and declared preferred dividends are called dividends in arrears.

Accepted Answer

A) True 
 B)False

Question 5

Accumulation of dividends in arrears on cumulative preferred stock does not guarantee the dividends will be paid.

Accepted Answer

A) True 
 B)False

Question 6

A stock dividend decreases the market price of the company's stock.

Accepted Answer

A) True 
 B)False

Question 7

Prior to June 30,a company has never had any treasury stock transactions.A company repurchased 100 shares of its $1 par common stock on June 30 for $40 per share.On July 20,it reissued 50 of these shares at $46 per share.On August 1,it reissued 20 of the shares at $38 per share.What is the journal entry necessary to record the repurchase of stock on June 30?

Accepted Answer

A) Debit Common Stock $4,000; credit Cash $4,000. 
B) Debit Common Stock $100; debit Treasury Stock $3,900; credit Cash $4,000. 
C) Debit Treasury Stock $3,900; debit Paid-in Capital,Treasury Stock $100; credit Cash $4,000. 
D) Debit Treasury Stock,Common $4,000; credit Cash $4,000. 
E) Debit Cash $4,000; credit Treasury Stock $4,000. 
A) Debit Common Stock $4,000; credit Cash $4,000. 
B) Debit Common Stock $100; debit Treasury Stock $3,900; credit Cash $4,000. 
C) Debit Treasury Stock $3,900; debit Paid-in Capital,Treasury Stock $100; credit Cash $4,000. 
D) Debit Treasury Stock,Common $4,000; credit Cash $4,000. 
E) Debit Cash $4,000; credit Treasury Stock $4,000.

Question 8

Explain how to calculate the price-earnings ratio and describe how it is used in analysis of a company's financial condition and performance.

Accepted Answer

The price-earnings ratio of a common sto

Question 9

Prior to June 30,a company has never had any treasury stock transactions.A company repurchased 100 shares of its common stock on June 30 for $40 per share.On July 20,it reissued 50 of these shares at $46 per share.On August 1,it reissued 20 of the shares at $38 per share.What is the balance in the Treasury Stock account on August 2?

Accepted Answer

A) $5,050. 
B) $2,600. 
C) $100. 
D) $1,200. 
E) $0. 
A) $5,050. 
B) $2,600. 
C) $100. 
D) $1,200. 
E) $0.

Question 10

Par value of a stock refers to the:

Accepted Answer

A) Issue price of the stock. 
B) Value assigned per share by the corporate charter. 
C) Market value of the stock on the date of the financial statements. 
D) Maximum selling price of the stock. 
E) Dividend value of the stock. 
A) Issue price of the stock. 
B) Value assigned per share by the corporate charter. 
C) Market value of the stock on the date of the financial statements. 
D) Maximum selling price of the stock. 
E) Dividend value of the stock.

Question 11

Which of the following is true of a stock dividend?

Accepted Answer

A) It is a liability on the balance sheet. 
B) The decision to declare a stock dividend resides with the shareholders. 
C) Transfers a portion of equity from retained earnings to a cash reserve account. 
D) Does not affect total equity,but transfer amounts between the components of equity. 
E) Reduces a corporation's assets and stockholders' equity. 
A) It is a liability on the balance sheet. 
B) The decision to declare a stock dividend resides with the shareholders. 
C) Transfers a portion of equity from retained earnings to a cash reserve account. 
D) Does not affect total equity,but transfer amounts between the components of equity. 
E) Reduces a corporation's assets and stockholders' equity.

Question 12

Companies report prior period adjustments,net of any income tax effects in the:

Accepted Answer

A) Statement of cash flows. 
B) Balance sheet. 
C) Statement of retained earnings. 
D) Income statement. 
E) No disclosure is required. 
A) Statement of cash flows. 
B) Balance sheet. 
C) Statement of retained earnings. 
D) Income statement. 
E) No disclosure is required.

Question 13

Shaw Corporation reported stockholders' equity on December 31 of the prior year as follows:
  The following selected transactions occurred during the current year:
   Prepare a statement of retained earnings as of December 31 of the current year.

Accepted Answer

The answer of Shaw Corporation reported stockholders' equity on December...

Question 14

The right of common shareholders to purchase their proportional share of any common stock later issued by the corporation is called a:

Accepted Answer

A) Preemptive right. 
B) Proxy right. 
C) Right to call. 
D) Financial leverage. 
E) Voting right. 
A) Preemptive right. 
B) Proxy right. 
C) Right to call. 
D) Financial leverage. 
E) Voting right.

Question 15

The declaration of cash dividends increases retained earnings.

Accepted Answer

A) True 
 B)False

Question 16

Price-earnings ratio is computed by dividing annual dividends by average market value per share.

Accepted Answer

A) True 
 B)False

Question 17

All stock dividends are recorded at par value so there would never be a credit to the paid-in capital in excess of par value account.

Accepted Answer

A) True 
 B)False

Question 18

A company's board of directors votes to declare a cash dividend of $.75 per share of common stock.The company has 15,000 shares authorized,10,000 issued,and 9,500 shares outstanding.The total amount of the cash dividend is:

Accepted Answer

A) $10,250. 
B) $14,625. 
C) $7,125. 
D) $7,500. 
E) $11,250. 
A) $10,250. 
B) $14,625. 
C) $7,125. 
D) $7,500. 
E) $11,250.

Question 19

The total number of shares outstanding is always equal to the number of shares authorized.

Accepted Answer

A) True 
 B)False

Question 20

A corporation paid a cash dividend of $0.85 per share during the current year.It had 1,550,000 common shares outstanding at year-end,its current year earnings per share was $3.45,and the stock's year-end market price was $10.63 per share.Calculate the company's dividend yield.

Accepted Answer

Dividend Yield = Cas

Exam 11: Corporate Reporting and Analysis

Common Stock Dividend Distributable is an equity account.

Hutter Corporation declared a $0.50 per share cash dividend on its common shares.The company has 20,000 shares authorized,9,000 shares issued,and 8,000 shares of common stock outstanding.The journal entry to record the dividend declaration is:

Mayan Company had net income of $132,000.The weighted-average common shares outstanding were 80,000.The company declared a $27,000 dividend on its noncumulative,nonparticipating preferred stock.There were no other stock transactions.The company's earnings per share is:

Paid and declared preferred dividends are called dividends in arrears.

Accumulation of dividends in arrears on cumulative preferred stock does not guarantee the dividends will be paid.

A stock dividend decreases the market price of the company's stock.

Explain how to calculate the price-earnings ratio and describe how it is used in analysis of a company's financial condition and performance.

Par value of a stock refers to the:

Which of the following is true of a stock dividend?

Companies report prior period adjustments,net of any income tax effects in the:

Shaw Corporation reported stockholders' equity on December 31 of the prior year as follows: The following selected transactions occurred during the current year: Prepare a statement of retained earnings as of December 31 of the current year.

The right of common shareholders to purchase their proportional share of any common stock later issued by the corporation is called a:

The declaration of cash dividends increases retained earnings.

Price-earnings ratio is computed by dividing annual dividends by average market value per share.

All stock dividends are recorded at par value so there would never be a credit to the paid-in capital in excess of par value account.

A company's board of directors votes to declare a cash dividend of $.75 per share of common stock.The company has 15,000 shares authorized,10,000 issued,and 9,500 shares outstanding.The total amount of the cash dividend is:

The total number of shares outstanding is always equal to the number of shares authorized.

A corporation paid a cash dividend of $0.85 per share during the current year.It had 1,550,000 common shares outstanding at year-end,its current year earnings per share was $3.45,and the stock's year-end market price was $10.63 per share.Calculate the company's dividend yield.

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

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