Question 1

The distribution of a stock dividend ________.

Accepted Answer

A) decreases both assets and liabilities 
B) decreases assets and increase liabilities 
C) effects only stockholder's equity accounts 
D) increases both dividends payable and cash 
A) decreases both assets and liabilities 
B) decreases assets and increase liabilities 
C) effects only stockholder's equity accounts 
D) increases both dividends payable and cash C

Question 2

Flowers,Inc.had beginning retained earnings of $125,000 on January 1,2017.During the year,Flowers declared and paid $40,000 of cash dividends and earned $55,000 of net income.Prepare a statement of retained earnings for Flowers,Inc.for the year ending December 31,2017.

Accepted Answer

The answer of Flowers,Inc.had beginning retained earnings of $125,000 on...

Question 3

A corporation has 10,000 shares of 20%,$100 par cumulative preferred stock outstanding and 37,000 shares of no-par common stock outstanding.Dividends of $25,000 are in arrears.At the end of the current year,the corporation declares a dividend of $246,000.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 $10.00 to preferred stock and $14.15 per share to common stock. 
B) The dividend per share is $24.60 to preferred stock and $0 per share to common stock. 
C) The dividend per share is $22.50 to preferred stock and $0.57 per share to common stock. 
D) The dividend per share is $24.60 to preferred stock and $0.57 per share to common stock. 
A) The dividend per share is $10.00 to preferred stock and $14.15 per share to common stock. 
B) The dividend per share is $24.60 to preferred stock and $0 per share to common stock. 
C) The dividend per share is $22.50 to preferred stock and $0.57 per share to common stock. 
D) The dividend per share is $24.60 to preferred stock and $0.57 per share to common stock. C

Question 4

Jenkins Services reported the following balances:
   
Compute earnings per share for 2016,price/earnings ratio for 2016,assuming the market price on December 31,2016 is $37.50 per share,and the rate of return on common stockholders' equity for 2016.
(Show your computations and round to two decimal places. )

Accepted Answer

Average number of common shares outstand

Question 5

Most states prohibit corporations from paying a dividend if a deficit will occur.

Accepted Answer

A) True 
 B)False

Question 6

On December 2,2017,Ewell,Inc.purchases land.In payment for the land,Ewell,Inc.issues 10,000 shares of common stock with $8 par value.The land has been appraised at a market value of $490,000.Which of the following is included in the journal entry to record this transaction?

Accepted Answer

A) debit Common Stock-$8 Par Value for $80,000 and debit Paid-In Capital in Excess of Par
-Common $410,000 
B) credit Common Stock-$8 Par Value for $80,000 and credit Paid-In Capital in Excess of Par-Common $410,000 
C) credit Common Stock-$8 Par Value for $490,000 
D) debit Cash $490,000 
A) debit Common Stock-$8 Par Value for $80,000 and debit Paid-In Capital in Excess of Par
-Common $410,000 
B) credit Common Stock-$8 Par Value for $80,000 and credit Paid-In Capital in Excess of Par-Common $410,000 
C) credit Common Stock-$8 Par Value for $490,000 
D) debit Cash $490,000

Question 7

A corporation declares a dividend of $2.00 per share on 11,000 shares of common stock.Which of the following is included in the entry to record the declaration?

Accepted Answer

A) Cash Dividends is debited for $22,000. 
B) Paid-In Capital in Excess of Par-Common is credited for $22,000. 
C) Cash Dividends is credited for $22,000. 
D) Dividends Payable-Common is debited for $22,000. 
A) Cash Dividends is debited for $22,000. 
B) Paid-In Capital in Excess of Par-Common is credited for $22,000. 
C) Cash Dividends is credited for $22,000. 
D) Dividends Payable-Common is debited for $22,000.

Question 8

When the corporation declares a stock dividend,a stockholder's percentage ownership in the stock of the corporation ________.

Accepted Answer

A) will decrease 
B) can increase or decrease 
C) will increase 
D) remains unchanged 
A) will decrease 
B) can increase or decrease 
C) will increase 
D) remains unchanged

Question 9

On December 1,2017,Galahad,Inc.had 200,000 shares of $1 par value common stock issued and outstanding.The next day Galahad declared and distributed a 50% stock dividend.The market value of the stock on December 2,2017 was $9 per share.Prepare the journal entry for the transaction.

Accepted Answer

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Explanati

Question 10

The entry to record the payment of a previously declared dividend of $1.50 per share on 16,500 shares of common stock includes a ________.

Accepted Answer

A) debit to Cash Dividends for $24,750 
B) debit to Cash $24,750 
C) credit to Cash Dividends for $24,750 
D) debit to Dividends Payable for $24,750 
A) debit to Cash Dividends for $24,750 
B) debit to Cash $24,750 
C) credit to Cash Dividends for $24,750 
D) debit to Dividends Payable for $24,750

Question 11

If preferred stock is issued for an amount above the par value,the amount of the par value times the number of shares issued is credited to Paid-In Capital in Excess of Par-Preferred.

Accepted Answer

A) True 
 B)False

Question 12

ANS,Inc.has 50,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding.The common stock has a $1.00 par value.The preferred stock has a $100 par value,a 5% dividend rate,and is noncumulative.On October 31,2017,the company declares the annual preferred dividend and dividends of $0.25 per share for common.Prepare the journal entry for the declaration of dividends.

Accepted Answer

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Explanation:
Dividends to pre

Question 13

On July 31,2017,Archer,Inc.reported the following information in the equity section of their balance sheet:
   
Assume that Archer splits its common stock 3-for-1.Prepare an equity section of the balance sheet that shows the effects of the stock split.(Please round all numbers to the nearest cent. )

Accepted Answer

Stockholders' equity

Question 14

Treasury stock is a contra equity account.

Accepted Answer

A) True 
 B)False

Question 15

Challenger Corporation currently has 120,000 shares outstanding of $1 par value common stock.The stock was originally issued for $12 per share.On March 15,the board of directors declares and distributes a 10% stock dividend when the stock is selling for $16 per share.Prepare the journal entry to record the stock dividend.

Accepted Answer

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Explanati

Question 16

Both common and preferred stock carry the same degree of investment risk for the stockholder.

Accepted Answer

A) True 
 B)False

Question 17

Cash dividends and treasury stock purchases ________.

Accepted Answer

A) represent cash payments that are made to ensure higher reported profits 
B) may be limited by creditors to ensure that the company maintains a minimum level of stockholders' equity 
C) may be restricted as a way to lower federal income tax expense 
D) make more resources available to pay liabilities 
A) represent cash payments that are made to ensure higher reported profits 
B) may be limited by creditors to ensure that the company maintains a minimum level of stockholders' equity 
C) may be restricted as a way to lower federal income tax expense 
D) make more resources available to pay liabilities

Question 18

Osbourne,Inc.issued 50,000 shares of common stock in exchange for manufacturing equipment.The equipment has a fair value of $1,210,000.The stock has a par value of $0.02 per share.The journal entry to record this transaction includes a ________.

Accepted Answer

A) debit to Cash for $12,090,000 
B) credit to Gain on Sale of Common Stock for $1,260,000 
C) credit to Paid-In Capital in Excess of Par-Common for $1,209,000 
D) credit to Common Stock-$0.02 Par Value for $1,210,000 
A) debit to Cash for $12,090,000 
B) credit to Gain on Sale of Common Stock for $1,260,000 
C) credit to Paid-In Capital in Excess of Par-Common for $1,209,000 
D) credit to Common Stock-$0.02 Par Value for $1,210,000

Question 19

Stock issued at amounts in excess of par value results in a gain that is reported on the income statement.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 13: Corporations

The distribution of a stock dividend ________.

Flowers,Inc.had beginning retained earnings of $125,000 on January 1,2017.During the year,Flowers declared and paid $40,000 of cash dividends and earned $55,000 of net income.Prepare a statement of retained earnings for Flowers,Inc.for the year ending December 31,2017.

Most states prohibit corporations from paying a dividend if a deficit will occur.

On December 2,2017,Ewell,Inc.purchases land.In payment for the land,Ewell,Inc.issues 10,000 shares of common stock with $8 par value.The land has been appraised at a market value of $490,000.Which of the following is included in the journal entry to record this transaction?

A corporation declares a dividend of $2.00 per share on 11,000 shares of common stock.Which of the following is included in the entry to record the declaration?

When the corporation declares a stock dividend,a stockholder's percentage ownership in the stock of the corporation ________.

On December 1,2017,Galahad,Inc.had 200,000 shares of $1 par value common stock issued and outstanding.The next day Galahad declared and distributed a 50% stock dividend.The market value of the stock on December 2,2017 was $9 per share.Prepare the journal entry for the transaction.

The entry to record the payment of a previously declared dividend of $1.50 per share on 16,500 shares of common stock includes a ________.

If preferred stock is issued for an amount above the par value,the amount of the par value times the number of shares issued is credited to Paid-In Capital in Excess of Par-Preferred.

On July 31,2017,Archer,Inc.reported the following information in the equity section of their balance sheet: Assume that Archer splits its common stock 3-for-1.Prepare an equity section of the balance sheet that shows the effects of the stock split.(Please round all numbers to the nearest cent. )

Treasury stock is a contra equity account.

Both common and preferred stock carry the same degree of investment risk for the stockholder.

Cash dividends and treasury stock purchases ________.

Osbourne,Inc.issued 50,000 shares of common stock in exchange for manufacturing equipment.The equipment has a fair value of $1,210,000.The stock has a par value of $0.02 per share.The journal entry to record this transaction includes a ________.

Stock issued at amounts in excess of par value results in a gain that is reported on the income statement.

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.

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

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