Question 1

A liability for dividends exists:

Accepted Answer

A)  When cumulative preferred stock is sold. 
B)  On the date of declaration. 
C)  On the date of record. 
D)  On the date of payment. 
E)  For dividends in arrears on cumulative preferred stock. 
A)  When cumulative preferred stock is sold. 
B)  On the date of declaration. 
C)  On the date of record. 
D)  On the date of payment. 
E)  For dividends in arrears on cumulative preferred stock. B

Question 2

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%. A

Question 3

A corporation declared and issued a 15% stock dividend on October 1.The following information was available immediately prior to the dividend:
$\begin{array}{llr}
  \text {  Retained earnings} &\$750,000\
 \text { Shares issued and outstanding } &60,000\
 \text {  Market value per share} &\$15\
 \text { Par value per share } &\$5\
\end{array}$

The amount that contributed capital will increase (decrease)as a result of recording this stock dividend is:

Accepted Answer

A)  $45,000. 
B)  $135,000. 
C)  $(45,000). 
D)  $(135,000). 
E)  $0. 
A)  $45,000. 
B)  $135,000. 
C)  $(45,000). 
D)  $(135,000). 
E)  $0. B

Question 4

A company made an error in calculating and reporting amortization expense in Year 1.The error was discovered in Year 2.The item should be reported as a prior period adjustment:

Accepted Answer

A)  on the Year 1 statement of retained earnings. 
B)  on the Year 1 income statement. 
C)  on the Year 2 statement of retained earnings. 
D)  on the Year 2 income statement. 
E)  accounted for with a cumulative "catch-up" adjustment in Year 2. 
A)  on the Year 1 statement of retained earnings. 
B)  on the Year 1 income statement. 
C)  on the Year 2 statement of retained earnings. 
D)  on the Year 2 income statement. 
E)  accounted for with a cumulative "catch-up" adjustment in Year 2.

Question 5

Avro Corporation has $875,000 in stockholders' equity and 350,000 weighted-average shares of common stock outstanding.Calculate the book value per common share.

Accepted Answer

$875,000/3

Question 6

Changes in accounting estimates are accounted for in current and future periods.

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 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 8

A liability for a dividend does not exist until the directors declare a dividend.

Accepted Answer

A) True 
 B)False

Question 9

Robin Company had net income of $67,000.The company had 9,000 weighted average common shares outstanding.The basic earnings per share equal $7.44 per share.

Accepted Answer

A) True 
 B)False

Question 10

A corporation issued 100 shares of its $5 par value common stock in payment of a $1,800 charge from its accountant for assistance in filing its charter with the state.The entry to record this transaction will include:

Accepted Answer

A)  A $1,800 credit to Common Stock. 
B)  A $300 debit to Organization Expenses. 
C)  A $1,300 credit to Paid-in Capital in Excess of Par Value, Common Stock. 
D)  A $1,800 debit to Legal Expenses. 
E)  A $1,800 credit to Cash. 
A)  A $1,800 credit to Common Stock. 
B)  A $300 debit to Organization Expenses. 
C)  A $1,300 credit to Paid-in Capital in Excess of Par Value, Common Stock. 
D)  A $1,800 debit to Legal Expenses. 
E)  A $1,800 credit to Cash.

Question 11

Record the following transactions of Naches Corporation in general journal form:
(a)Reacquired 8,000 of its own $3 par value common stock at $20 cash per share.The stock was originally issued at $15 per share.
(b)Sold 2,000 shares of the stock reacquired under part (a)at $23 cash per share.
(c)Sold 3,000 shares of the stock reacquired under part (a)at $19 cash per share.

Accepted Answer

\[\begin{array} { | l | l | l | l | } 
\

Question 12

A stock split is the distribution of additional shares of stock to stockholders according to their percent of ownership.

Accepted Answer

A) True 
 B)False

Question 13

Percy Corporation was formed on January 1.The corporate charter authorized 100,000 shares of $10 par value common stock.During the first month of operation,the corporation issued 400 shares to its attorneys in payment of a $5,000 charge for drawing up the articles of incorporation.The entry to record this transaction would include:

Accepted Answer

A)  A debit to Organization Expenses for $4,000. 
B)  A debit to Organization Expenses for $5,000. 
C)  A credit to Common Stock for $5,000. 
D)  A credit to Paid-in Capital in Excess of Par Value, Common Stock for $5,000. 
E)  A debit to Paid-in Capital in Excess of Par Value, Common Stock for $2,000. 
A)  A debit to Organization Expenses for $4,000. 
B)  A debit to Organization Expenses for $5,000. 
C)  A credit to Common Stock for $5,000. 
D)  A credit to Paid-in Capital in Excess of Par Value, Common Stock for $5,000. 
E)  A debit to Paid-in Capital in Excess of Par Value, Common Stock for $2,000.

Question 14

A company had a beginning balance in retained earnings of $430,000.It had net income of $60,000 and paid out cash dividends of $56,250 in the current period.The ending balance in retained earnings equals:

Accepted Answer

A)  $546,250. 
B)  $426,250. 
C)  $116,250. 
D)  $433,750. 
E)  $490,000. 
A)  $546,250. 
B)  $426,250. 
C)  $116,250. 
D)  $433,750. 
E)  $490,000.

Question 15

A company had the following stockholders' equity on January 1:
 $\begin{array}{|l|c|}
\hline \text { Common Stock - \$1 par value; $ 1,000,000 $ shares authorized, }\
\text { 350,000 shares issued and outstanding}& \$ 350,000 \
\hline \text { Paid-in capital in excess of par value, common stock } & 700,000 \
\hline \text { Retained earnings } & 364,000 \
\hline\text { Total stockholders' equity }&\$1,414,000\
\hline
\end{array}$ 
On January 10,the company declared a 40% stock dividend to stockholders of record on January 25,to be distributed January 31.The market value of the stock on January 10 prior to the dividend was $20 per share.What is the book value per common share on February 1?

Accepted Answer

Total stockholders' equity does not chan

Question 16

Preferred stock that allows preferred stockholders to share with common stockholders any dividends paid in excess of the percent or dollar amount stated on the preferred stock is called:

Accepted Answer

A)  Convertible preferred stock. 
B)  Participating preferred stock. 
C)  Premium stock. 
D)  Cumulative preferred stock. 
E)  Common stock. 
A)  Convertible preferred stock. 
B)  Participating preferred stock. 
C)  Premium stock. 
D)  Cumulative preferred stock. 
E)  Common stock.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

The statement of changes in stockholders' equity:

Accepted Answer

A)  Is part of the statement of retained earnings. 
B)  Shows only the ending balances in stockholders' equity. 
C)  Describes changes in paid-in capital and retained earnings subcategories. 
D)  Does not include changes in treasury stock. 
E)  Is reported by very few companies. 
A)  Is part of the statement of retained earnings. 
B)  Shows only the ending balances in stockholders' equity. 
C)  Describes changes in paid-in capital and retained earnings subcategories. 
D)  Does not include changes in treasury stock. 
E)  Is reported by very few companies.

Question 19

Sweet Company's outstanding stock consists of 1,000 shares of noncumulative 5% preferred stock with a $100 par value and 10,000 shares of common stock with a $10 par value.During the first three years of operation,the corporation declared and paid the following total cash dividends.
$$\begin{array} { c c r } 
& \text { Dividend Declared } \
\text { year 1 } & \$ 2,000 \
\text { year 2 } & \$ 6,000 \
\text { year 3 } & \$ 32,000
\end{array}$$

The total amount of dividends paid to preferred and common shareholders over the three-year period is:

Accepted Answer

A)  $15,000 preferred; $25,000 common. 
B)  $11,000 preferred; $29,000 common. 
C)  $5,000 preferred; $35,000 common. 
D)  $12,000 preferred; $28,000 common. 
E)  $10,000 preferred; $30,000 common. 
A)  $15,000 preferred; $25,000 common. 
B)  $11,000 preferred; $29,000 common. 
C)  $5,000 preferred; $35,000 common. 
D)  $12,000 preferred; $28,000 common. 
E)  $10,000 preferred; $30,000 common.

Question 20

The total amount of cash and other assets the corporation receives from its stockholders in exchange for common stock is called ________.

Accepted Answer

The answer of The total amount of cash and other...

A liability for dividends exists:

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 company made an error in calculating and reporting amortization expense in Year 1.The error was discovered in Year 2.The item should be reported as a prior period adjustment:

Avro Corporation has $875,000 in stockholders' equity and 350,000 weighted-average shares of common stock outstanding.Calculate the book value per common share.

Changes in accounting estimates are accounted for in current and future periods.

A liability for a dividend does not exist until the directors declare a dividend.

Robin Company had net income of $67,000.The company had 9,000 weighted average common shares outstanding.The basic earnings per share equal $7.44 per share.

A corporation issued 100 shares of its $5 par value common stock in payment of a $1,800 charge from its accountant for assistance in filing its charter with the state.The entry to record this transaction will include:

A stock split is the distribution of additional shares of stock to stockholders according to their percent of ownership.

A company had a beginning balance in retained earnings of $430,000.It had net income of $60,000 and paid out cash dividends of $56,250 in the current period.The ending balance in retained earnings equals:

Preferred stock that allows preferred stockholders to share with common stockholders any dividends paid in excess of the percent or dollar amount stated on the preferred stock is called:

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

The statement of changes in stockholders' equity:

The total amount of cash and other assets the corporation receives from its stockholders in exchange for common stock is called ________.

Accounting in Business

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

Filters

Exam 11: Corporate Reporting and Analysis

A liability for dividends exists:

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 company made an error in calculating and reporting amortization expense in Year 1.The error was discovered in Year 2.The item should be reported as a prior period adjustment:

Avro Corporation has $875,000 in stockholders' equity and 350,000 weighted-average shares of common stock outstanding.Calculate the book value per common share.

Changes in accounting estimates are accounted for in current and future periods.

A liability for a dividend does not exist until the directors declare a dividend.

Robin Company had net income of $67,000.The company had 9,000 weighted average common shares outstanding.The basic earnings per share equal $7.44 per share.

A corporation issued 100 shares of its $5 par value common stock in payment of a $1,800 charge from its accountant for assistance in filing its charter with the state.The entry to record this transaction will include:

A stock split is the distribution of additional shares of stock to stockholders according to their percent of ownership.

A company had a beginning balance in retained earnings of $430,000.It had net income of $60,000 and paid out cash dividends of $56,250 in the current period.The ending balance in retained earnings equals:

Preferred stock that allows preferred stockholders to share with common stockholders any dividends paid in excess of the percent or dollar amount stated on the preferred stock is called:

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

The statement of changes in stockholders' equity:

The total amount of cash and other assets the corporation receives from its stockholders in exchange for common stock is called ________.

Accounting in Business

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

Filters