Question 1

Regarding discontinued operations,which of the following statements is correct?

Accepted Answer

A)  Gains and losses on the sale of plant assets are reported as discontinued operations. 
B)  A loss on discontinued operations is reported with an addition for the applicable income tax. 
C)  A loss on discontinued operations is included with an addition for the income tax savings on the loss. 
D)  The disposal of the financing segment of a large corporation would be reported as a discontinued operation. 
A)  Gains and losses on the sale of plant assets are reported as discontinued operations. 
B)  A loss on discontinued operations is reported with an addition for the applicable income tax. 
C)  A loss on discontinued operations is included with an addition for the income tax savings on the loss. 
D)  The disposal of the financing segment of a large corporation would be reported as a discontinued operation.

Question 2

Assume the following information for Western Sales,Inc.: • Common Stock,$1.00 par,232,000 shares issued,185,000 shares outstanding
• Paid-In Capital in Excess of Par-Common: $1,690,000
• Retained Earnings: $2,460,000
• Treasury Stock: 47,000 shares purchased at $17 per share
If Western Sales purchases an additional 8000 shares of treasury stock at $20 per share,what number of shares will be shown as issued and outstanding?

Accepted Answer

A)  185,000 issued; 185,000 outstanding 
B)  224,000 issued; 185,000 outstanding 
C)  232,000 issued; 177,000 outstanding 
D)  232,000 issued; 185,000 outstanding 
A)  185,000 issued; 185,000 outstanding 
B)  224,000 issued; 185,000 outstanding 
C)  232,000 issued; 177,000 outstanding 
D)  232,000 issued; 185,000 outstanding

Question 3

The statement of stockholders' equity has more information than the statement of retained earnings because it reports the changes in all stockholders' equity accounts.

Accepted Answer

A) True 
 B)False

Question 4

On November 1,2018,Worldwide,Inc.declared a dividend of $3.00 per share.Worldwide,Inc.has 20,000 shares of common stock outstanding and no preferred stock.Prepare the journal entry to record this transaction.Omit explanation.

Accepted Answer

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Question 5

Gains and losses on the sale of plant assets are always reported as discontinued operations.

Accepted Answer

A) True 
 B)False

Question 6

Income tax expense is added to arrive at income from continuing operations.

Accepted Answer

A) True 
 B)False

Question 7

Earnings per share reports the amount of net income (loss)for each share of the company's issued common stock.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is TRUE of dividends?

Accepted Answer

A)  Dividends are a distribution of cash, stock, or other property to stockholders. 
B)  Dividends increase assets and decrease total stockholders' equity of a corporation. 
C)  Dividend payments decrease paid-in capital. 
D)  Dividend payments increase stockholders' equity. 
A)  Dividends are a distribution of cash, stock, or other property to stockholders. 
B)  Dividends increase assets and decrease total stockholders' equity of a corporation. 
C)  Dividend payments decrease paid-in capital. 
D)  Dividend payments increase stockholders' equity.

Question 9

A corporation originally issued $13 par value common stock for $15 per share.Which of the following is included in the entry to record the purchase of 300 shares of treasury stock for $11 per share?

Accepted Answer

A)  Treasury Stock-Common is debited for $3300. 
B)  Treasury Stock-Common is credited for $45. 
C)  Retained Earnings is debited for $1650. 
D)  Treasury Stock-Common is debited for $1650. 
A)  Treasury Stock-Common is debited for $3300. 
B)  Treasury Stock-Common is credited for $45. 
C)  Retained Earnings is debited for $1650. 
D)  Treasury Stock-Common is debited for $1650.

Question 10

December,Inc.issued 4,000 shares of preferred stock for $240,000.The stock has a par value of $60 per share.Prepare the journal entry for this transaction.Omit explanation.

Accepted Answer

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Question 11

On November 1,2018,Nada,Inc.declared a dividend of $5.00 per share on common stock.Nada,Inc.has 20,000 shares of common stock outstanding and no preferred stock.The date of record is November 15,and the payment date is November 30,2018.Which of the following is the journal entry needed on November 30,2018?

Accepted Answer

A)  Debit Cash Dividends $100,000, and credit Dividends Payable-Common $100,000. 
B)  Debit Dividends Payable-Common $100,000, and credit Cash $100,000. 
C)  Debit Cash $100,000, and credit Dividends Payable-Common $100,000. 
D)  Debit Cash Dividends $100,000, and credit Cash $100,000. 
A)  Debit Cash Dividends $100,000, and credit Dividends Payable-Common $100,000. 
B)  Debit Dividends Payable-Common $100,000, and credit Cash $100,000. 
C)  Debit Cash $100,000, and credit Dividends Payable-Common $100,000. 
D)  Debit Cash Dividends $100,000, and credit Cash $100,000.

Question 12

On November 1,2018,Uno,Inc.declared a dividend of $4.50 per share.Uno,Inc.has 23,000 shares of common stock outstanding and no preferred stock.Which of the following is the journal entry needed to record the declaration of the dividend?

Accepted Answer

A)  Debit Dividends Payable-Common $103,500, and credit Retained Earnings $103,500. 
B)  Debit Cash Dividends $103,500, and credit Cash $103,500. 
C)  Debit Cash Dividends $103,500, and credit Dividends Payable-Common $103,500. 
D)  Debit Cash $103,500, and credit Dividends Payable-Common $103,500. 
A)  Debit Dividends Payable-Common $103,500, and credit Retained Earnings $103,500. 
B)  Debit Cash Dividends $103,500, and credit Cash $103,500. 
C)  Debit Cash Dividends $103,500, and credit Dividends Payable-Common $103,500. 
D)  Debit Cash $103,500, and credit Dividends Payable-Common $103,500.

Question 13

Treasury stock is ________.

Accepted Answer

A)  a contra equity account 
B)  a contra asset account 
C)  a liability account 
D)  an asset account 
A)  a contra equity account 
B)  a contra asset account 
C)  a liability account 
D)  an asset account

Question 14

Treasury stock has voting rights and receives cash or stock dividends.

Accepted Answer

A) True 
 B)False

Question 15

A company may purchase treasury stock to increase net assets by buying high and selling low.

Accepted Answer

A) True 
 B)False

Question 16

Par value is an arbitrary amount that is assigned by the state when the corporate charter is issued.

Accepted Answer

A) True 
 B)False

Question 17

The declaration of a cash dividend does not create an obligation for the corporation.

Accepted Answer

A) True 
 B)False

Question 18

On June 30,2018,Dakota,Inc.showed the following data on the equity section of their balance sheet: $$\begin{array} { | l | r | } 
\hline \text { Stockholders' Equity } & \
\hline \text { Common Stock, } \$ 1 \text { par; } 195,000 \text { shares authorized, } & \
149,000 \text { shares issued and outstanding } & \$ 149,000 \
\hline \text { Paid-In Capital in Excess of Par-Common } & \$ 260,000 \
\hline \text { Retained Earnings } & \$ 949,000 \
\hline \text { Total Stockholder's Equity } & \$ 1,358,000 \
\hline
\end{array}$$ On July 1,2018,the company declared and distributed a 11% stock dividend.The market value of the stock at that time was $20 per share.As a result of this stock dividend,what is the balance of Retained Earnings?

Accepted Answer

A)  $770,580 
B)  $951,000 
C)  $981,780 
D)  $621,200 
A)  $770,580 
B)  $951,000 
C)  $981,780 
D)  $621,200

Question 19

Noncumulative preferred stock is in arrears if the dividend has not been paid for the year.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following types of stock has less investment risk?

Accepted Answer

A)  common stock 
B)  par value stock 
C)  no-par stock 
D)  preferred stock 
A)  common stock 
B)  par value stock 
C)  no-par stock 
D)  preferred stock

Exam 13: Corporations

Regarding discontinued operations,which of the following statements is correct?

The statement of stockholders' equity has more information than the statement of retained earnings because it reports the changes in all stockholders' equity accounts.

On November 1,2018,Worldwide,Inc.declared a dividend of $3.00 per share.Worldwide,Inc.has 20,000 shares of common stock outstanding and no preferred stock.Prepare the journal entry to record this transaction.Omit explanation.

Gains and losses on the sale of plant assets are always reported as discontinued operations.

Income tax expense is added to arrive at income from continuing operations.

Earnings per share reports the amount of net income (loss)for each share of the company's issued common stock.

Which of the following is TRUE of dividends?

A corporation originally issued $13 par value common stock for $15 per share.Which of the following is included in the entry to record the purchase of 300 shares of treasury stock for $11 per share?

December,Inc.issued 4,000 shares of preferred stock for $240,000.The stock has a par value of $60 per share.Prepare the journal entry for this transaction.Omit explanation.

On November 1,2018,Uno,Inc.declared a dividend of $4.50 per share.Uno,Inc.has 23,000 shares of common stock outstanding and no preferred stock.Which of the following is the journal entry needed to record the declaration of the dividend?

Treasury stock is ________.

Treasury stock has voting rights and receives cash or stock dividends.

A company may purchase treasury stock to increase net assets by buying high and selling low.

Par value is an arbitrary amount that is assigned by the state when the corporate charter is issued.

The declaration of a cash dividend does not create an obligation for the corporation.

Noncumulative preferred stock is in arrears if the dividend has not been paid for the year.

Which of the following types of stock has less investment risk?

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

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