Question 1

A registrar keeps stockholder records and prepares official lists of stockholders and dividend payments.

Accepted Answer

A) True 
 B)False

Question 2

The date of record is the date that directors vote to pay a cash dividend to shareholders.

Accepted Answer

A) True 
 B)False

Question 3

The following selected transactions took place during the current year for a company:
 $$\begin{array} {| l | l | } 
\hline \text { Feb } 25 & \text { Declared a } \$ 2.50 \text { per share cash dividend on } 20,000 \text { shares of common } \
&\text { stock outstanding }\
\hline \text { Mar. } & 20 \text { Paid the cash dividends declared on Feb. } 25 . \
\hline \text { Dec } & \text { Closed the } \$ 72,000 \text { credit balance in Income Summary that reflects net } \
31 & \text { income to Retained Earnings. }\
\hline
\end{array}$$ 
(a)Prepare the journal entries for these transactions.
(b)If Retained Earnings had a $155,000 credit balance on January 1,calculate its year-end balance as of December 31.

Accepted Answer

None

Question 4

A large stock dividend only occurs when a distribution of more than 50% of previously outstanding shares is issued.

Accepted Answer

A) True 
 B)False

Question 5

Retained earnings are part of the stockholders' claims on the company's net assets.

Accepted Answer

A) True 
 B)False

Question 6

Torino Company has 10,000 shares of $5 par value,4% cumulative and nonparticipating preferred stock and 100,000 shares of $10 par value common stock outstanding.The company paid total cash dividends of $1,000 in its first year of operation.The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:

Accepted Answer

A)  $1,000. 
B)  $2,000. 
C)  $3,000. 
D)  $4,000. 
E)  $0. 
A)  $1,000. 
B)  $2,000. 
C)  $3,000. 
D)  $4,000. 
E)  $0.

Question 7

Eastline Corporation had 10,000 shares of $10 par value common stock outstanding when the board of directors declared a stock dividend of 3,000 shares.At the time of the stock dividend,the market value per share was $12.The entry to record this dividend is:

Accepted Answer

A)  Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $36,000. 
B)  Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $30,000; credit Paid-In Capital in Excess of Par Value, Common Stock $6,000. 
C)  Debit Common Stock Dividend Distributable $36,000; credit Retained Earnings $36,000. 
D)  Debit Retained Earnings $30,000; credit Common Stock Dividend Distributable $30,000. 
E)  No entry is needed. 
A)  Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $36,000. 
B)  Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $30,000; credit Paid-In Capital in Excess of Par Value, Common Stock $6,000. 
C)  Debit Common Stock Dividend Distributable $36,000; credit Retained Earnings $36,000. 
D)  Debit Retained Earnings $30,000; credit Common Stock Dividend Distributable $30,000. 
E)  No entry is needed.

Question 8

Ultimate Sportswear has $100,000 of 8% noncumulative,nonparticipating,preferred stock outstanding.Ultimate Sportswear also has $500,000 of common stock outstanding.In the company's first year of operation,no dividends were paid.During the second year,the company paid cash dividends of $30,000.This dividend should be distributed as follows:

Accepted Answer

A)  $8,000 preferred; $22,000 common. 
B)  $16,000 preferred; $14,000 common. 
C)  $7,500 preferred; $22,500 common. 
D)  $15,000 preferred; $15,000 common. 
E)  $0 preferred; $30,000 common. 
A)  $8,000 preferred; $22,000 common. 
B)  $16,000 preferred; $14,000 common. 
C)  $7,500 preferred; $22,500 common. 
D)  $15,000 preferred; $15,000 common. 
E)  $0 preferred; $30,000 common.

Question 9

Large stock dividends are recorded at par or stated value.

Accepted Answer

A) True 
 B)False

Question 10

A company has earnings per share of $6.50.Its dividend per share is $0.50,and its market price per share is $80.Its price-earnings ratio equals 13.

Accepted Answer

A) True 
 B)False

Question 11

If a corporation is authorized to issue 1,000 shares of $5 common stock,it is said to have $5,000 of stock outstanding.

Accepted Answer

A) True 
 B)False

Question 12

A company was organized in January 2016 and has 20,000 shares of $10 par value,10%,nonparticipating preferred stock outstanding and 150,000 shares of $2 par value common stock outstanding.It has declared and paid cash dividends each year as shown below.Calculate the total dividends distributed to each class of stockholder under each of the assumptions given.
 $$\begin{array} { | l | l | l | l | l | l | } 
\hline & & \text { Assuming Preferred } &&{ \text { Assuming Preferred } } \
\hline & &  { \text { Stock } } &  &{ \text { Stock } } \
\hline & \text { Cash } & \text { Is Noncumulative } && \text { Is Cumulative } & \
\hline & \text { Dividends } & & & & \
\hline & \text { Declared } & \text { Preferred } & \text { Common } & \text { Preferred } & \text { Common } \
\hline \text { Year }& \text { and Paid } & \text { Dividend } & \text { Dividend } & \text { Dividend } & \text { Dividend } \
 \hline & & & & & \
\hline & & & & & \
\hline 2016 & \$ 18,000 & & & & \
\hline 2017 & \$ 36,000 & & & & \
\hline2018 & \$ 60,000 & & & & \
\hline
\end{array}$$

Accepted Answer

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

Question 13

A company reported $1,050,000 in net income for the current year.Earnings per common share is $1.75 and the year-end market price of the shares is $31.50.Calculate the company's price earnings ratio.

Accepted Answer

Price-Earnings Ratio = Market

Question 14

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 reissuance of treasury stock on July 20?

Accepted Answer

A)  Debit Common Stock $2,300; credit Cash $2,300. 
B)  Debit Common Stock $20; debit Treasury Stock $2,290; credit Cash $2,300. 
C)  Debit Common Stock $2,300; credit Treasury Stock $2,000; credit Paid-In Capital, Treasury Stock $300. 
D)  Debit Cash $2,300; credit Paid-in Capital, Treasury Stock $300; credit Treasury Stock $2,000. 
E)  Debit Cash $2,300; credit Treasury Stock $2,300. 
A)  Debit Common Stock $2,300; credit Cash $2,300. 
B)  Debit Common Stock $20; debit Treasury Stock $2,290; credit Cash $2,300. 
C)  Debit Common Stock $2,300; credit Treasury Stock $2,000; credit Paid-In Capital, Treasury Stock $300. 
D)  Debit Cash $2,300; credit Paid-in Capital, Treasury Stock $300; credit Treasury Stock $2,000. 
E)  Debit Cash $2,300; credit Treasury Stock $2,300.

Question 15

Cactus Joe Corporation reported stockholders' equity on January 1 of the current year as follows: Common Stock,$5 par value,1,000,000 shares authorized,600,000 shares issued; Paid-in Capital in Excess of Par Value,Common Stock,$1,025,000; Retained Earnings,$1,850,000.Prepare journal entries to record the following transactions:
 $$\begin{array} {| l | l | } 
\hline \text { May } 1 & \begin{array} { l } 
\text { A cash dividend of } \$ 1.05 \text { per common share was declared by the board of } \
\text { directors to stockholders of record on May 20, payable June 1. }
\end{array} \
\hline \text { May 20 } & \text { The date of record. } \
\hline \text { Iune } 1 & \text { Paid the cash dividend. } \
\hline
\end{array}$$

Accepted Answer

None

Question 16

Dividing stockholders' equity applicable to common shares by the number of common shares outstanding yields the book value per common share.

Accepted Answer

A) True 
 B)False

Question 17

A company paid $0.85 in cash dividends per share.Its earnings per share is $3.50,and its market price per share is $35.50.Its dividend yield equals:

Accepted Answer

A)  2.0%. 
B)  2.4%. 
C)  9.9%. 
D)  21.4%. 
E)  24.2%. 
A)  2.0%. 
B)  2.4%. 
C)  9.9%. 
D)  21.4%. 
E)  24.2%.

Question 18

A corporation with $10 par common stock issues a large stock dividend.The capitalization of retained earnings is equal to:

Accepted Answer

A)  The par value of the shares to be distributed. 
B)  The par value of the shares outstanding. 
C)  The market value of the shares to be distributed. 
D)  The market value of the shares outstanding. 
E)  There is no capitalization of retained earnings in the case of a large stock dividend. 
A)  The par value of the shares to be distributed. 
B)  The par value of the shares outstanding. 
C)  The market value of the shares to be distributed. 
D)  The market value of the shares outstanding. 
E)  There is no capitalization of retained earnings in the case of a large stock dividend.

Question 19

The number of shares that a corporation's charter allows it to sell is referred to as:

Accepted Answer

A)  Issued stock. 
B)  Outstanding stock. 
C)  Common stock. 
D)  Preferred stock. 
E)  Authorized stock. 
A)  Issued stock. 
B)  Outstanding stock. 
C)  Common stock. 
D)  Preferred stock. 
E)  Authorized stock.

Question 20

A common statutory restriction is reported on the income statement whereas; a common contractual restriction is reported in the stockholders' equity section of the balance sheet.

Accepted Answer

A) True 
 B)False

A registrar keeps stockholder records and prepares official lists of stockholders and dividend payments.

The date of record is the date that directors vote to pay a cash dividend to shareholders.

A large stock dividend only occurs when a distribution of more than 50% of previously outstanding shares is issued.

Retained earnings are part of the stockholders' claims on the company's net assets.

Eastline Corporation had 10,000 shares of $10 par value common stock outstanding when the board of directors declared a stock dividend of 3,000 shares.At the time of the stock dividend,the market value per share was $12.The entry to record this dividend is:

Large stock dividends are recorded at par or stated value.

A company has earnings per share of $6.50.Its dividend per share is $0.50,and its market price per share is $80.Its price-earnings ratio equals 13.

If a corporation is authorized to issue 1,000 shares of $5 common stock,it is said to have $5,000 of stock outstanding.

A company reported $1,050,000 in net income for the current year.Earnings per common share is $1.75 and the year-end market price of the shares is $31.50.Calculate the company's price earnings ratio.

Dividing stockholders' equity applicable to common shares by the number of common shares outstanding yields the book value per common share.

A company paid $0.85 in cash dividends per share.Its earnings per share is $3.50,and its market price per share is $35.50.Its dividend yield equals:

A corporation with $10 par common stock issues a large stock dividend.The capitalization of retained earnings is equal to:

The number of shares that a corporation's charter allows it to sell is referred to as:

A common statutory restriction is reported on the income statement whereas; a common contractual restriction is reported in the stockholders' equity section of the balance sheet.

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 registrar keeps stockholder records and prepares official lists of stockholders and dividend payments.

The date of record is the date that directors vote to pay a cash dividend to shareholders.

A large stock dividend only occurs when a distribution of more than 50% of previously outstanding shares is issued.

Retained earnings are part of the stockholders' claims on the company's net assets.

Eastline Corporation had 10,000 shares of $10 par value common stock outstanding when the board of directors declared a stock dividend of 3,000 shares.At the time of the stock dividend,the market value per share was $12.The entry to record this dividend is:

Large stock dividends are recorded at par or stated value.

A company has earnings per share of $6.50.Its dividend per share is $0.50,and its market price per share is $80.Its price-earnings ratio equals 13.

If a corporation is authorized to issue 1,000 shares of $5 common stock,it is said to have $5,000 of stock outstanding.

A company reported $1,050,000 in net income for the current year.Earnings per common share is $1.75 and the year-end market price of the shares is $31.50.Calculate the company's price earnings ratio.

Dividing stockholders' equity applicable to common shares by the number of common shares outstanding yields the book value per common share.

A company paid $0.85 in cash dividends per share.Its earnings per share is $3.50,and its market price per share is $35.50.Its dividend yield equals:

A corporation with $10 par common stock issues a large stock dividend.The capitalization of retained earnings is equal to:

The number of shares that a corporation's charter allows it to sell is referred to as:

A common statutory restriction is reported on the income statement whereas; a common contractual restriction is reported in the stockholders' equity section of the balance sheet.

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