Question 1

Stockholders' equity consists of which of the following?

Accepted Answer

A) Long-term assets. 
B) Paid-in capital and retained earnings. 
C) Paid-in capital and par value. 
D) Retained earnings and cash. 
E) Premiums and discounts. 
A) Long-term assets. 
B) Paid-in capital and retained earnings. 
C) Paid-in capital and par value. 
D) Retained earnings and cash. 
E) Premiums and discounts.

Question 2

Treasury stock is stock that has been authorized,issued,and is outstanding.

Accepted Answer

A) True 
 B)False

Question 3

The amount assigned per share to stock by the corporation in its charter is the ________.

Accepted Answer

The answer of The amount assigned per share to stock...

Question 4

The group responsible for overseeing the corporation's activities is (are)the ________.

Accepted Answer

board of d

Question 5

Purchasing treasury stock reduces the corporation's assets and stockholders' equity by unequal amounts.

Accepted Answer

A) True 
 B)False

Question 6

On August 1,a company's board of directors declared a 10% stock dividend to be distributed on September 1 to the stockholders of record on August 20.The company had 1,000,000 shares of $2.50 par value common stock outstanding with a market value of $23 per share.Prepare the journal entries required on August 1,August 20,and September 1.

Accepted Answer

The answer of On August 1,a company's board of directors...

Question 7

Rhoads Corporation is authorized to issue 250,000 shares of $50 par,10%,noncumulative,nonparticipating preferred stock and 5,000,000 shares of no-par common stock.Prepare journal entries to record the following selected transactions that occurred during this year:

Accepted Answer

The answer of Rhoads Corporation is authorized to issue 250,000...

Question 8

Market value per share is:

Accepted Answer

A) The price at which a stock is bought and sold. 
B) A contractual commitment by an investor to purchase unissued shares of stock. 
C) Stock not assigned a value per share. 
D) The right of common stockholders to protect their proportionate interests in a corporation by having the first opportunity to purchase additional shares of common stock issued by the corporation. 
E) An amount assigned to no-par stock. 
A) The price at which a stock is bought and sold. 
B) A contractual commitment by an investor to purchase unissued shares of stock. 
C) Stock not assigned a value per share. 
D) The right of common stockholders to protect their proportionate interests in a corporation by having the first opportunity to purchase additional shares of common stock issued by the corporation. 
E) An amount assigned to no-par stock.

Question 9

A corporation received its charter and began business this year.The company is authorized to issue 500,000 shares of $100 par,6%,noncumulative,nonparticipating preferred stock,and 1,000,000 shares of no-par common stock.The following selected transactions occurred during this year:
   Prepare journal entries to record these transactions.

Accepted Answer

The answer of A corporation received its charter and began...

Question 10

A company reported $960,000 in net income for the current year.Total weighted-average common shares outstanding are 150,000 shares,and the year-end market price is $67.20 per common share.Calculate the company's price earnings ratio.

Accepted Answer

Price-Earnings Ratio = Market

Question 11

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share.The issue price was $10 per share.The entry to record this transaction would be:

Accepted Answer

A) Debit Cash $50,000; credit Paid-in Capital in Excess of Stated Value,Common Stock $45,000; credit Common Stock $5,000. 
B) Debit Cash $50,000; credit Common Stock $50,000. 
C) Debit Common Stock $50,000; credit Cash $50,000. 
D) Debit Treasury Stock $50,000; credit Cash $50,000. 
E) Debit Common Stock $25,000; debit Paid-in Capital in Excess of Par Value,Common Stock $5,000; credit Common Stock $45,000. 
A) Debit Cash $50,000; credit Paid-in Capital in Excess of Stated Value,Common Stock $45,000; credit Common Stock $5,000. 
B) Debit Cash $50,000; credit Common Stock $50,000. 
C) Debit Common Stock $50,000; credit Cash $50,000. 
D) Debit Treasury Stock $50,000; credit Cash $50,000. 
E) Debit Common Stock $25,000; debit Paid-in Capital in Excess of Par Value,Common Stock $5,000; credit Common Stock $45,000.

Question 12

A company issued 60 shares of $100 par value common stock for $7,000 cash.The total amount of paid-in capital in excess of par is:

Accepted Answer

A) $100. 
B) $600. 
C) $1,000. 
D) $6,000. 
E) $7,000. 
A) $100. 
B) $600. 
C) $1,000. 
D) $6,000. 
E) $7,000.

Question 13

________ is a general term that refers to any shares issued to obtain owner financing in a corporation.

Accepted Answer

The answer of ________ is a general term that refers...

Question 14

If a corporation receives assets other than cash in exchange for stock,it records the assets received at their market value.

Accepted Answer

A) True 
 B)False

Question 15

Fetzer Company declared a $0.55 per share cash dividend.The company has 200,000 shares authorized,190,000 shares issued,and 8,000 shares in treasury stock.The journal entry to record the dividend declaration is:

Accepted Answer

A) Debit Retained Earnings $104,500; credit Common Dividends Payable $104,500. 
B) Debit Common Dividends Payable $104,500; credit Cash $104,500. 
C) Debit Retained Earnings $100,100; credit Common Dividends Payable $100,100. 
D) Debit Common Dividends Payable $100,100; credit Cash $100,100. 
E) Debit Retained Earnings $110,000; credit Common Dividends Payable $110,000. 
A) Debit Retained Earnings $104,500; credit Common Dividends Payable $104,500. 
B) Debit Common Dividends Payable $104,500; credit Cash $104,500. 
C) Debit Retained Earnings $100,100; credit Common Dividends Payable $100,100. 
D) Debit Common Dividends Payable $100,100; credit Cash $100,100. 
E) Debit Retained Earnings $110,000; credit Common Dividends Payable $110,000.

Question 16

The Discount on Common Stock account reflects:

Accepted Answer

A) The difference between the par value of stock and its issue price when it is issued at a price below par value. 
B) One share's portion of the issued corporation's net assets recorded in its accounts. 
C) The difference between the par value of the stock and the amount paid-in by stockholders when the amount paid-in is more than par value. 
D) An amount of assets defined by state law that stockholders must invest and leave invested in a corporation. 
E) The amount a corporation must pay in addition to dividends in arrears if and when it exercises its right to retire a share of callable preferred stock. 
A) The difference between the par value of stock and its issue price when it is issued at a price below par value. 
B) One share's portion of the issued corporation's net assets recorded in its accounts. 
C) The difference between the par value of the stock and the amount paid-in by stockholders when the amount paid-in is more than par value. 
D) An amount of assets defined by state law that stockholders must invest and leave invested in a corporation. 
E) The amount a corporation must pay in addition to dividends in arrears if and when it exercises its right to retire a share of callable preferred stock.

Question 17

A company paid $0.48 in cash dividends per share.Its earnings per share is $3.20 and its market price per share is $20.00.Its dividend yield equals:

Accepted Answer

A) 2.4%. 
B) 6.25%. 
C) 6.4%. 
D) 6.67%. 
E) 15.00%. 
A) 2.4%. 
B) 6.25%. 
C) 6.4%. 
D) 6.67%. 
E) 15.00%.

Question 18

A corporation may not legally give shares of its stock to promoters in exchange for their services in organizing the corporation.

Accepted Answer

A) True 
 B)False

Question 19

Explain how each of the following items should be reported by a corporation:
(1)The accounting department discovered that an entry was made last year to Insurance Expense instead of to Prepaid Insurance.The after-tax effect of the charge to Insurance Expense was $5,000.
(2)The accounting department determined the depreciable lives of equipment will be five years instead of the original estimate of seven years.

Accepted Answer

(1)This is an error that should be repor

Question 20

Cash dividends reduce Retained Earnings.

Accepted Answer

A) True 
 B)False

Exam 11: Corporate Reporting and Analysis

Stockholders' equity consists of which of the following?

Treasury stock is stock that has been authorized,issued,and is outstanding.

The amount assigned per share to stock by the corporation in its charter is the ________.

The group responsible for overseeing the corporation's activities is (are)the ________.

Purchasing treasury stock reduces the corporation's assets and stockholders' equity by unequal amounts.

Rhoads Corporation is authorized to issue 250,000 shares of $50 par,10%,noncumulative,nonparticipating preferred stock and 5,000,000 shares of no-par common stock.Prepare journal entries to record the following selected transactions that occurred during this year:

Market value per share is:

A company reported $960,000 in net income for the current year.Total weighted-average common shares outstanding are 150,000 shares,and the year-end market price is $67.20 per common share.Calculate the company's price earnings ratio.

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share.The issue price was $10 per share.The entry to record this transaction would be:

A company issued 60 shares of $100 par value common stock for $7,000 cash.The total amount of paid-in capital in excess of par is:

________ is a general term that refers to any shares issued to obtain owner financing in a corporation.

If a corporation receives assets other than cash in exchange for stock,it records the assets received at their market value.

Fetzer Company declared a $0.55 per share cash dividend.The company has 200,000 shares authorized,190,000 shares issued,and 8,000 shares in treasury stock.The journal entry to record the dividend declaration is:

The Discount on Common Stock account reflects:

A company paid $0.48 in cash dividends per share.Its earnings per share is $3.20 and its market price per share is $20.00.Its dividend yield equals:

A corporation may not legally give shares of its stock to promoters in exchange for their services in organizing the corporation.

Cash dividends reduce Retained Earnings.

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

Lean Principles and Accounting

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