Question 1

The book value per share for a corporation is

Accepted Answer

A) the market price of the stock. 
B) the cost of investments in stock of other corporations. 
C) based on the excess of total assets over total liabilities. 
D) the amount stockholders would receive if they sold their shares back to the corporation. 
A) the market price of the stock. 
B) the cost of investments in stock of other corporations. 
C) based on the excess of total assets over total liabilities. 
D) the amount stockholders would receive if they sold their shares back to the corporation.

Question 2

Anole Company

Anole Company was incorporated as a new business on January 1, 2017. The company is authorized to issue 20,000 shares of $5 par value common stock and 10,000 shares of 6%, $10 par value, cumulative, participating preferred stock. On January 1, 2017, the company issued 8,000 shares of common stock for $15 per share and 2,000 shares of preferred stock for $30 per share. Net income for the year ended December 31, 2017, was $375,000.

-Refer to the information about Anole Company.  
The number of Anole's unissued shares of common stock at December 31,2017,is

Accepted Answer

A) 6,000. 
B) 8,000. 
C) 10,000. 
D) 12,000. 
A) 6,000. 
B) 8,000. 
C) 10,000. 
D) 12,000.

Question 3

Many firms operate at a dividend payout ratio of less than 50%.Why don't firms pay a larger percentage of income as dividends?

Accepted Answer

Firms do not pay out all of their income

Question 4

Select the best answer from the list below to complete statements  that follow.
 $$\begin{array} { l l l } 
\text { Authorized shares } & \text { treasury stock } & \text { book value per share } \
\text { issued shares } & \text { stock dividend } & \text { par value per share } \
\text { outstanding shares } & \text { additional paid-in-capital } & \text { market value per share } \
\text { stock split } & \text { dividend payout ratio } & \text { retained earnings }
\end{array}$$  
-An arbitrary amount that is stated on the face of the stock certificate is __________.

Accepted Answer

The answer of 
Select the best answer from the list...

Question 5

Treasury stock is stock that has been issued,but not currently outstanding.

Accepted Answer

A) True 
 B)False

Question 6

Cash dividends become a liability to a corporation on the date of record.

Accepted Answer

A) True 
 B)False

Question 7

Using the concept of comprehensive income,which of the following items is included as part of comprehensive income but not as part of net income?

Accepted Answer

A) Unrealized holding gains or losses 
B) Accounting changes 
C) Extraordinary items 
D) Loss on sale of investments 
A) Unrealized holding gains or losses 
B) Accounting changes 
C) Extraordinary items 
D) Loss on sale of investments

Question 8

Comprehensive income is

Accepted Answer

A) considered an appropriation of retained earnings when reported in the Stockholders' Equity section of the balance sheet. 
B) the result of all events and transactions that affect income during the accounting period that are reported on the income statement. 
C) reporting all items that are not under management's control on the statement of retained earnings. 
D) an all-inclusive approach to income that includes transactions that affect stockholders' equity with the exception of those transactions that affect owners. 
A) considered an appropriation of retained earnings when reported in the Stockholders' Equity section of the balance sheet. 
B) the result of all events and transactions that affect income during the accounting period that are reported on the income statement. 
C) reporting all items that are not under management's control on the statement of retained earnings. 
D) an all-inclusive approach to income that includes transactions that affect stockholders' equity with the exception of those transactions that affect owners.

Question 9

Perry Corporation issues 20,000 shares of $0.50 par common stock for $6 per share;the Additional Paid-In Capital-Common account will increase by

Accepted Answer

A) $110,000. 
B) $10,000. 
C) $120,000. 
D) $130,000. 
A) $110,000. 
B) $10,000. 
C) $120,000. 
D) $130,000.

Question 10

How is treasury stock shown on the balance sheet?

Accepted Answer

A) Treasury stock is not shown on the balance sheet. 
B) Treasury stock is shown as an increase in stockholders' equity. 
C) Treasury stock is shown as a decrease in stockholders' equity. 
D) Treasury stock is shown as an asset. 
A) Treasury stock is not shown on the balance sheet. 
B) Treasury stock is shown as an increase in stockholders' equity. 
C) Treasury stock is shown as a decrease in stockholders' equity. 
D) Treasury stock is shown as an asset.

Question 11

Lakeview Company reported the following amounts on its balance sheet at December 1, 2017:$\begin{array}{lr}
\text { Preferred stock, } \$ 2 \text { par, } 3,000 \text { shares issued and outstanding } & \$ 6,000 \
\text { Common stock, } \$ 10 \text { par, } 8 \%, 400 \text { shares issued and outstanding } & 4,000 \
\text { Additional paid-in capital—common } & \underline{22,000} \
\text { Total contributed capital } & \$ 32,000 \
\text { Retained earnings } & \underline{48,000} \
\text { Total stockholders' equity } & \underline{\$ 80,000}
\end{array}$

The following transactions occurred during December:
 
1.	Declared a 20% stock dividend on common stock on December 3, when the stock was selling at $12 per share. The stock dividend will be distributed on December 20, 2017.
 	 
2.	Distributed the common stock dividend on December 20.
 	 
3.	Approved a 2-for-1 stock split of the common stock on December 28, when the stock was selling for $20 per share.

A)$\text {  Show the effect of the transactions on the accounting equation. }$  
   B) Answer the following questions:
1. How many common shares are outstanding at December 31,2017 ?
2. What effect will the stock split have on the stock's market value?

Accepted Answer

A)
1. 
 @#IMG-DLM& 2. 
 @#IMG-DLM&3. No effect

B.

Question 12

All of the following are reasons for a company to repurchase its previously issued stock,except

Accepted Answer

A) to support the market price of the stock. 
B) to resell to employees. 
C) to increase the shares outstanding. 
D) for bonuses to employees. 
A) to support the market price of the stock. 
B) to resell to employees. 
C) to increase the shares outstanding. 
D) for bonuses to employees.

Question 13

A sole proprietorship is a separate entity for legal purposes.

Accepted Answer

A) True 
 B)False

Question 14

Explain the two ways that a dividend rate on preferred stock may be stated by giving examples.

Accepted Answer

The examples in student answers may vary

Question 15

Manson World reported the following: ​
Common stock,$1 par,200,000 shares authorized,100,000 shares issued and outstanding
​
What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share when the stock split is declared?

Accepted Answer

A) Retained earnings in the amount of $400,000 is transferred to the contributed capital accounts. 
B) Cash decreases $400,000. 
C) Additional Paid-In Capital increases $400,000. 
D) A stock split has no effect on total stockholders' equity. 
A) Retained earnings in the amount of $400,000 is transferred to the contributed capital accounts. 
B) Cash decreases $400,000. 
C) Additional Paid-In Capital increases $400,000. 
D) A stock split has no effect on total stockholders' equity.

Question 16

Vegan Company reported the following: ​
Common stock,$5 par,200,000 shares authorized,50,000 shares issued and outstanding
​
What is the effect of issuing 2,000 shares of common stock in exchange for land valued by a realtor at $36,000 if the common stock sells for $12 per share and is regularly traded?

Accepted Answer

A) The Land account increases by $24,000. 
B) Retained Earnings decreases by $10,000. 
C) Common Stock increases by $36,000. 
D) Additional Paid-In Capital-Common increases by $24,000. 
A) The Land account increases by $24,000. 
B) Retained Earnings decreases by $10,000. 
C) Common Stock increases by $36,000. 
D) Additional Paid-In Capital-Common increases by $24,000.

Question 17

Vegas Finance Company reported the following: ​
Common stock,$10 par,100,000 shares authorized,80,000 shares issued and outstanding
​
What is the effect of issuing 1,000 shares of common stock at $15 per share?

Accepted Answer

A) Cash increases $10,000. 
B) Common Stock increases $15,000. 
C) Additional Paid-In Capital increases $5,000. 
D) Retained Earnings increases $5,000. 
A) Cash increases $10,000. 
B) Common Stock increases $15,000. 
C) Additional Paid-In Capital increases $5,000. 
D) Retained Earnings increases $5,000.

Question 18

What is the difference between book value and market value of stock?

Accepted Answer

Market value is the amount that each sha

Question 19

Use the comparative financial statements of Penny Company for the year ended December 31,2017 to answer the following question(s).
Penny Company
Statement of Stockholder's Equity
For the Year Ended December 31,2017​
Required
   (1)What is the primary cause of the change in Penny's stockholders' equity from January 1,2017,to December 31,2017?
(2)Did Penny declare dividends during 2017? How do you know? Which items would be included as part of comprehensive income,if any?

Accepted Answer

(1)Stockholders' equity increased from $

Question 20

CarWorks Company has 100,000 authorized shares of $4 par common stock.The company issued 40,000 shares at $8.Subsequently,CarWorks 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) $8,800 
B) $4,800 
C) $3,200 
D) $6,400 
A) $8,800 
B) $4,800 
C) $3,200 
D) $6,400

The book value per share for a corporation is

Many firms operate at a dividend payout ratio of less than 50%.Why don't firms pay a larger percentage of income as dividends?

Treasury stock is stock that has been issued,but not currently outstanding.

Cash dividends become a liability to a corporation on the date of record.

Using the concept of comprehensive income,which of the following items is included as part of comprehensive income but not as part of net income?

Comprehensive income is

Perry Corporation issues 20,000 shares of $0.50 par common stock for $6 per share;the Additional Paid-In Capital-Common account will increase by

How is treasury stock shown on the balance sheet?

All of the following are reasons for a company to repurchase its previously issued stock,except

A sole proprietorship is a separate entity for legal purposes.

Explain the two ways that a dividend rate on preferred stock may be stated by giving examples.

Manson World reported the following: Common stock,$1 par,200,000 shares authorized,100,000 shares issued and outstanding What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share when the stock split is declared?

Vegan Company reported the following: Common stock,$5 par,200,000 shares authorized,50,000 shares issued and outstanding What is the effect of issuing 2,000 shares of common stock in exchange for land valued by a realtor at $36,000 if the common stock sells for $12 per share and is regularly traded?

Vegas Finance Company reported the following: Common stock,$10 par,100,000 shares authorized,80,000 shares issued and outstanding What is the effect of issuing 1,000 shares of common stock at $15 per share?

What is the difference between book value and market value of stock?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

Exam 11: Stockholders Equity

The book value per share for a corporation is

Many firms operate at a dividend payout ratio of less than 50%.Why don't firms pay a larger percentage of income as dividends?

Treasury stock is stock that has been issued,but not currently outstanding.

Cash dividends become a liability to a corporation on the date of record.

Using the concept of comprehensive income,which of the following items is included as part of comprehensive income but not as part of net income?

Comprehensive income is

Perry Corporation issues 20,000 shares of $0.50 par common stock for $6 per share;the Additional Paid-In Capital-Common account will increase by

How is treasury stock shown on the balance sheet?

All of the following are reasons for a company to repurchase its previously issued stock,except

A sole proprietorship is a separate entity for legal purposes.

Explain the two ways that a dividend rate on preferred stock may be stated by giving examples.

Manson World reported the following: ​ Common stock,$1 par,200,000 shares authorized,100,000 shares issued and outstanding ​ What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share when the stock split is declared?

Vegas Finance Company reported the following: ​ Common stock,$10 par,100,000 shares authorized,80,000 shares issued and outstanding ​ What is the effect of issuing 1,000 shares of common stock at $15 per share?

What is the difference between book value and market value of stock?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

Manson World reported the following: Common stock,$1 par,200,000 shares authorized,100,000 shares issued and outstanding What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share when the stock split is declared?

Vegas Finance Company reported the following: Common stock,$10 par,100,000 shares authorized,80,000 shares issued and outstanding What is the effect of issuing 1,000 shares of common stock at $15 per share?