Question 1

A corporation will never pay dividends on treasury stock.

Accepted Answer

A) True 
 B)False  True

Question 2

When a corporation sells 9,000 shares of $12 par value common stock for $159,000,Common Stock is credited for $108,000.

Accepted Answer

A) True 
 B)False  True

Question 3

If a company retires preferred stock,________.

Accepted Answer

A)  total stockholders' equity will decrease 
B)  total stockholders' equity will increase 
C)  the company can record a gain or loss on retirement of stock 
D)  the number of outstanding shares will increase 
A)  total stockholders' equity will decrease 
B)  total stockholders' equity will increase 
C)  the company can record a gain or loss on retirement of stock 
D)  the number of outstanding shares will increase A

Question 4

The account Paid-In Capital from Treasury Stock Transactions has a credit balance of $2,000.The corporation resells 450 shares of its treasury stock.These shares were acquired for $10 per share and sold for $3 per share.The entry to record the sale of treasury stock includes a debit to Retained Earnings of $3,150.

Accepted Answer

A) True 
 B)False

Question 5

A corporation has 14,000 shares of 13%,$104 par noncumulative preferred stock outstanding and 22,000 shares of no-par common stock outstanding.At the end of the current year,the corporation declares a dividend of $220,000.What is the dividend per share for preferred stock and for common stock? (Round your answer to the nearest cent.)

Accepted Answer

A)  The dividend per share is $13.52 to preferred stock and $1.40 to common stock. 
B)  The dividend per share is $8.26 to preferred stock and $1.40 to common stock. 
C)  The dividend per share is $13.52 to preferred stock and $13.52 to common stock. 
D)  The dividend per share is $13.52 to preferred stock and $27.50 to common stock. 
A)  The dividend per share is $13.52 to preferred stock and $1.40 to common stock. 
B)  The dividend per share is $8.26 to preferred stock and $1.40 to common stock. 
C)  The dividend per share is $13.52 to preferred stock and $13.52 to common stock. 
D)  The dividend per share is $13.52 to preferred stock and $27.50 to common stock.

Question 6

When computing earnings per share,preferred dividends are subtracted from net income because the preferred stockholders have the first claim to dividends.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is included in the entry to record the issuance of 14,000 shares of $7 par value common stock at $21 per share for cash?

Accepted Answer

A)  Cash is debited for $294,000. 
B)  Common Stock is debited for $98,000. 
C)  Common Stock is credited for $294,000. 
D)  Paid-In Capital in Excess of Par-Common is debited for $196,000. 
A)  Cash is debited for $294,000. 
B)  Common Stock is debited for $98,000. 
C)  Common Stock is credited for $294,000. 
D)  Paid-In Capital in Excess of Par-Common is debited for $196,000.

Question 8

On December 2,2018,St.Andrews,Inc.purchases land.In exchange for the land,St.Andrews,Inc.issues 8,000 shares of common stock with $1.00 par value.The land has been appraised at a market value of $400,000.Prepare the journal entry for this transaction.Omit explanation.

Accepted Answer

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Question 9

Lark had net income for 2018 of $104,000.Lark had 32,000 shares of common stock outstanding at the beginning of the year and 48,000 shares of common stock outstanding at the end of the year.There were 5000 shares of preferred stock outstanding all year.During 2018,Lark declared and paid preferred dividends of $30,000.On December 31,2018,the market price of Lark's common stock is $30 per share and the market price of its preferred stock is $57 per share.What is Lark's price/earnings ratio at December 31,2018? (Round any intermediate calculations and your final answer to the nearest cent.)

Accepted Answer

A)  30.81 
B)  11.54 
C)  13.85 
D)  16.22 
A)  30.81 
B)  11.54 
C)  13.85 
D)  16.22

Question 10

Which of the following actions will increase the Common Stock account?

Accepted Answer

A)  cash dividend 
B)  stock split 
C)  stock dividend declared and distributed 
D)  purchase of treasury stock 
A)  cash dividend 
B)  stock split 
C)  stock dividend declared and distributed 
D)  purchase of treasury stock

Question 11

Which of the following is the correct description of dividends in arrears?

Accepted Answer

A)  the cumulative amount of dividends that were not paid in previous years 
B)  the cumulative amount of dividends that were paid in previous years 
C)  the amount of dividends that were paid after the payment date 
D)  the amount of dividends that will be paid in the next year 
A)  the cumulative amount of dividends that were not paid in previous years 
B)  the cumulative amount of dividends that were paid in previous years 
C)  the amount of dividends that were paid after the payment date 
D)  the amount of dividends that will be paid in the next year

Question 12

Midtown,Inc.had the following transactions in 2018,its first year of operations: • Issued 31,000 shares of common stock.Stock has par value of $1.00 per share and was issued at $20.00 per share.
• Earned net income of $70,000.
• Paid no dividends.
At the end of 2018,what is total stockholders' equity?

Accepted Answer

A)  $31,000 
B)  $690,000 
C)  $620,000 
D)  $70,000 
A)  $31,000 
B)  $690,000 
C)  $620,000 
D)  $70,000

Question 13

Land Corporation reported the following: $$\begin{array} { | l | r | } 
\hline \text { Common Stock, } \$ 5 \text { par, } 211,000 \text { shares authorized, } 165,000 \text { shares issued } & \$ 825,000 \
\hline \text { Paid in Capital in Excess of Par - Common } & 217,000 \
\hline \text { Retained Earnings } & 207,000 \
\hline \text { Total Stockholders' Equity } & \$ 1,249,000 \
\hline
\end{array}$$ Which of the following is included in the entry to record the corporation's purchase of 40,000 shares of its common stock for $12.00 per share?

Accepted Answer

A)  Treasury Stock-Common is debited for $480,000. 
B)  Paid-In Capital from Treasury Stock Transactions is credited for $135,000. 
C)  Retained Earnings is debited for $480,000. 
D)  Common Stock-$5 Par Value is credited for $200,000. 
A)  Treasury Stock-Common is debited for $480,000. 
B)  Paid-In Capital from Treasury Stock Transactions is credited for $135,000. 
C)  Retained Earnings is debited for $480,000. 
D)  Common Stock-$5 Par Value is credited for $200,000.

Question 14

A corporation has 20,000 shares of 17%,$50 par cumulative preferred stock outstanding and 25,000 shares of no-par common stock outstanding.Preferred dividends of $36,000 are in arrears.At the end of the current year,the corporation declares a dividend of $208,000.How is the dividend allocated between preferred and common stockholders?

Accepted Answer

A)  The dividend is allocated $2000 to preferred stockholders and $206,000 to common stockholders. 
B)  The dividend is allocated $206,000 to preferred stockholders and $2000 to common stockholders. 
C)  The dividend is allocated $208,000 to preferred stockholders and no dividend is paid to common stockholders. 
D)  The dividend is allocated $170,000 to preferred stockholders and $38,000 to common stockholders. 
A)  The dividend is allocated $2000 to preferred stockholders and $206,000 to common stockholders. 
B)  The dividend is allocated $206,000 to preferred stockholders and $2000 to common stockholders. 
C)  The dividend is allocated $208,000 to preferred stockholders and no dividend is paid to common stockholders. 
D)  The dividend is allocated $170,000 to preferred stockholders and $38,000 to common stockholders.

Question 15

The statement of stockholders' equity does not show the changes to the Retained Earnings account because that information is provided in the statement of retained earnings.

Accepted Answer

A) True 
 B)False

Question 16

A 3-for-1 stock split of a $3 par value share will result in three shares of $1 par value being issued for each share of $3 par value stock.

Accepted Answer

A) True 
 B)False

Question 17

Risingstar Corporation currently has 129,000 shares outstanding of $3 par value common stock.The stock was originally issued for $14 per share.On March 15,the board of directors declares a 13% stock dividend when the stock is selling for $22 per share.Which of the following is the correct journal entry to record this transaction? (Do not round intermediate calculations.)

Accepted Answer

A)  debit Common Stock Dividend Distributable $50,310, debit Paid-In Capital in Excess of Par-Common for $318,630 and credit Retained Earnings $368,940 
B)  debit Stock Dividends $368,940 and credit Common Stock Dividend Distributable $368,940 
C)  debit Stock Dividends $368,940, credit Common Stock Dividend Distributable $50,310 and credit Paid-In Capital in Excess of Par-Common $318,630 
D)  debit Paid-In Capital in Excess of Par-Common $368,940 and credit Retained Earnings $368,940 
A)  debit Common Stock Dividend Distributable $50,310, debit Paid-In Capital in Excess of Par-Common for $318,630 and credit Retained Earnings $368,940 
B)  debit Stock Dividends $368,940 and credit Common Stock Dividend Distributable $368,940 
C)  debit Stock Dividends $368,940, credit Common Stock Dividend Distributable $50,310 and credit Paid-In Capital in Excess of Par-Common $318,630 
D)  debit Paid-In Capital in Excess of Par-Common $368,940 and credit Retained Earnings $368,940

Question 18

Daniel Corporation had net income for 2018 of $75,000.Daniel had 6000 shares of common stock outstanding at the beginning of the year and 22,000 shares of common stock outstanding at the end of the year.There were 8000 shares of preferred stock outstanding all year.During 2018,Daniel declared and paid preferred dividends of $26,000.On December 31,2018,the market price of Daniel's common stock is $45 per share and the market price of its preferred stock is $73 per share.What is Daniel's price/earnings ratio at December 31,2018? (Round any intermediate calculations and your final answer to the nearest cent.)

Accepted Answer

A)  12.86 
B)  20.86 
C)  13.20 
D)  13.63 
A)  12.86 
B)  20.86 
C)  13.20 
D)  13.63

Question 19

The rate of return on common stockholders' equity shows the relationship between net income available to common stockholders and their average common equity invested in the company.

Accepted Answer

A) True 
 B)False

Question 20

A company that reports a discontinued operation item must also report earnings per share for the item.

Accepted Answer

A) True 
 B)False

A corporation will never pay dividends on treasury stock.

When a corporation sells 9,000 shares of $12 par value common stock for $159,000,Common Stock is credited for $108,000.

If a company retires preferred stock,________.

When computing earnings per share,preferred dividends are subtracted from net income because the preferred stockholders have the first claim to dividends.

Which of the following is included in the entry to record the issuance of 14,000 shares of $7 par value common stock at $21 per share for cash?

On December 2,2018,St.Andrews,Inc.purchases land.In exchange for the land,St.Andrews,Inc.issues 8,000 shares of common stock with $1.00 par value.The land has been appraised at a market value of $400,000.Prepare the journal entry for this transaction.Omit explanation.

Which of the following actions will increase the Common Stock account?

Which of the following is the correct description of dividends in arrears?

The statement of stockholders' equity does not show the changes to the Retained Earnings account because that information is provided in the statement of retained earnings.

A 3-for-1 stock split of a $3 par value share will result in three shares of $1 par value being issued for each share of $3 par value stock.

The rate of return on common stockholders' equity shows the relationship between net income available to common stockholders and their average common equity invested in the company.

A company that reports a discontinued operation item must also report earnings per share for the item.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters

Exam 13: Corporations

A corporation will never pay dividends on treasury stock.

When a corporation sells 9,000 shares of $12 par value common stock for $159,000,Common Stock is credited for $108,000.

If a company retires preferred stock,________.

When computing earnings per share,preferred dividends are subtracted from net income because the preferred stockholders have the first claim to dividends.

Which of the following is included in the entry to record the issuance of 14,000 shares of $7 par value common stock at $21 per share for cash?

On December 2,2018,St.Andrews,Inc.purchases land.In exchange for the land,St.Andrews,Inc.issues 8,000 shares of common stock with $1.00 par value.The land has been appraised at a market value of $400,000.Prepare the journal entry for this transaction.Omit explanation.

Which of the following actions will increase the Common Stock account?

Which of the following is the correct description of dividends in arrears?

The statement of stockholders' equity does not show the changes to the Retained Earnings account because that information is provided in the statement of retained earnings.

A 3-for-1 stock split of a $3 par value share will result in three shares of $1 par value being issued for each share of $3 par value stock.

The rate of return on common stockholders' equity shows the relationship between net income available to common stockholders and their average common equity invested in the company.

A company that reports a discontinued operation item must also report earnings per share for the item.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters