Question 1

Which of the following occurs when a corporation distributes a stock dividend?

Accepted Answer

A) Total liabilities would increase. 
B) Total stockholders' equity would increase. 
C) Total assets would decrease. 
D) Total stockholders' equity would be unchanged. 
A) Total liabilities would increase. 
B) Total stockholders' equity would increase. 
C) Total assets would decrease. 
D) Total stockholders' equity would be unchanged.

Question 2

Preferred stock is stock ________.

Accepted Answer

A) that sells for a high price 
B) that is distributed to employees as annual bonuses 
C) that is distributed by corporations to avoid liquidation 
D) that gives its owners certain advantages over common stockholders 
A) that sells for a high price 
B) that is distributed to employees as annual bonuses 
C) that is distributed by corporations to avoid liquidation 
D) that gives its owners certain advantages over common stockholders

Question 3

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 4

Lerner,Inc.had the following transactions in 2017,its first year of operations:
• Issued 25,000 shares of common stock.The stock has a par value of $2.00 per share and was issued at $14.00 per share.
• Issued 1,700 shares of $150 par value preferred stock at par.
• Earned net income of $36,000.
• Paid no dividends.
At the end of 2017,what is total stockholders' equity?

Accepted Answer

A) $641,000 
B) $305,000 
C) $300,000 
D) $605,000 
A) $641,000 
B) $305,000 
C) $300,000 
D) $605,000

Question 5

Which of the following statements is true?

Accepted Answer

A) Appropriations of retained earnings require journal entries,but restrictions on retained earnings are usually reported in notes to the financial statements. 
B) No journal entries are needed to appropriate or restrict retained earnings. 
C) Both appropriations and restrictions of retained earnings require journal entries. 
D) Restrictions on retained earnings must be journalized,but appropriations are usually reported in notes to the financial statements. 
A) Appropriations of retained earnings require journal entries,but restrictions on retained earnings are usually reported in notes to the financial statements. 
B) No journal entries are needed to appropriate or restrict retained earnings. 
C) Both appropriations and restrictions of retained earnings require journal entries. 
D) Restrictions on retained earnings must be journalized,but appropriations are usually reported in notes to the financial statements.

Question 6

Preferred stockholders receive a dividend preference over common stockholders.

Accepted Answer

A) True 
 B)False

Question 7

A corporation has 13,000 shares of 12%,$103 par noncumulative preferred stock outstanding and 24,000 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 $12.36 to preferred stock and $2.47 to common stock. 
B) The dividend per share is $8.02 to preferred stock and $2.47 to common stock. 
C) The dividend per share is $12.36 to preferred stock and $12.36 to common stock. 
D) The dividend per share is $12.36 to preferred stock and $27.96 to common stock. 
A) The dividend per share is $12.36 to preferred stock and $2.47 to common stock. 
B) The dividend per share is $8.02 to preferred stock and $2.47 to common stock. 
C) The dividend per share is $12.36 to preferred stock and $12.36 to common stock. 
D) The dividend per share is $12.36 to preferred stock and $27.96 to common stock.

Question 8

ABC has 53,000 shares of $19.00 par common stock outstanding.ABC announces a stock split of 4-for-1.What is the effect of the split?

Accepted Answer

A) par stays at $19.00;total shares increase to 13,250 
B) par drops to $9.50;total shares stay at 53,000 
C) par drops to $4.75;total shares increase to 212,000 
D) par goes to $76.00;total shares increase to 212,000 
A) par stays at $19.00;total shares increase to 13,250 
B) par drops to $9.50;total shares stay at 53,000 
C) par drops to $4.75;total shares increase to 212,000 
D) par goes to $76.00;total shares increase to 212,000

Question 9

The statement of retained earnings reports how the company's retained earnings balance changed from the beginning of the period to the end of the period.

Accepted Answer

A) True 
 B)False

Question 10

A corporation has 20,000 shares of 12%,$60 par cumulative preferred stock outstanding and 38,000 shares of no-par common stock outstanding.Dividends of $14,000 are in arrears.At the end of the current year,the corporation declares a dividend of $164,000.How is the dividend allocated between preferred and common stockholders?

Accepted Answer

A) The dividend is allocated $6,000 to preferred stockholders and $158,000 to common stockholders. 
B) The dividend is allocated $158,000 to preferred stockholders and $6,000 to common stockholders. 
C) The dividend is allocated $164,000 to preferred stockholders and no dividend is paid to common stockholders. 
D) The dividend is allocated $144,000 to preferred stockholders and $20,000 to common stockholders. 
A) The dividend is allocated $6,000 to preferred stockholders and $158,000 to common stockholders. 
B) The dividend is allocated $158,000 to preferred stockholders and $6,000 to common stockholders. 
C) The dividend is allocated $164,000 to preferred stockholders and no dividend is paid to common stockholders. 
D) The dividend is allocated $144,000 to preferred stockholders and $20,000 to common stockholders.

Question 11

Supermart,Inc.completed the following treasury stock transactions in 2016:
   
(Assume the balance in Paid-In Capital from Treasury Stock Transactions on March 24 is $ 1,200. )
Journalize these transactions.Explanations are not required.
How will Supermart,Inc.report treasury stock on its balance sheet as of December 31,2016?

Accepted Answer

@#IMG-DLM& Supermart,Inc.will report tre

Question 12

Preferred stockholders ________.

Accepted Answer

A) are guaranteed that they will not have a loss on their investment 
B) are guaranteed to receive an annual dividend payment 
C) receive a set percentage of corporation net income 
D) receive a dividend preference over common stockholders 
A) are guaranteed that they will not have a loss on their investment 
B) are guaranteed to receive an annual dividend payment 
C) receive a set percentage of corporation net income 
D) receive a dividend preference over common stockholders

Question 13

Holland Corporation's annual report is as follows.
 
Based on the information provided,find the rate of return on common stockholders' equity on March 31,2017.(Round your final answer two decimal places. )

Accepted Answer

A) 8.44% 
B) 9.31% 
C) 8.56% 
D) 8.30% 
A) 8.44% 
B) 9.31% 
C) 8.56% 
D) 8.30%

Question 14

Overton,Inc.had the following transactions in 2017,its first year of operations:
• Issued 15,000 shares of common stock.Stock has par value of $0.01 per share and was issued at $39.00 per share.
• Earned net income of $300,000.
• Paid dividends of $15.00 per share.
At the end of 2017,what is total stockholders' equity?

Accepted Answer

A) $585,000 
B) $660,000 
C) $75,000 
D) $1,110,000 
A) $585,000 
B) $660,000 
C) $75,000 
D) $1,110,000

Question 15

Preferred Stock is included in the long-term asset section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 16

If preferred stock is noncumulative,the company is required to pay dividends that were passed in previous years.

Accepted Answer

A) True 
 B)False

Question 17

The 2017 balance for Mason Electronics reported the following items - with 2016 figures given for comparison:
 
Net income for 2016 was $20,000.Compute the rate of return on common stockholders' equity for 2016.(Round your final answer to two decimal places. )

Accepted Answer

A) 3.48% 
B) 8.13% 
C) 8.85% 
D) 3.76% 
A) 3.48% 
B) 8.13% 
C) 8.85% 
D) 3.76%

Question 18

Which of the following corporate characteristics is a disadvantage of a corporation?

Accepted Answer

A) Stockholders have limited liability. 
B) A corporation has a continuous life. 
C) There is no mutual agency between the stockholders and the corporation. 
D) Earnings of a corporation may be subject to double taxation. 
A) Stockholders have limited liability. 
B) A corporation has a continuous life. 
C) There is no mutual agency between the stockholders and the corporation. 
D) Earnings of a corporation may be subject to double taxation.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Castle,Inc.had the following transactions in 2017,its first year of operations:
• Issued 22,000 shares of common stock.The stock has a par value of $4.00 per share and was issued at $20.00 per share.
• Issued 1,200 shares of $160 par value preferred stock at par.
• Earned net income of $40,000.
• Paid no dividends.
At the end of 2017,what is the total amount of paid-in capital?

Accepted Answer

A) $672,000 
B) $280,000 
C) $440,000 
D) $632,000 
A) $672,000 
B) $280,000 
C) $440,000 
D) $632,000

Which of the following occurs when a corporation distributes a stock dividend?

Preferred stock is stock ________.

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.

Which of the following statements is true?

Preferred stockholders receive a dividend preference over common stockholders.

ABC has 53,000 shares of $19.00 par common stock outstanding.ABC announces a stock split of 4-for-1.What is the effect of the split?

The statement of retained earnings reports how the company's retained earnings balance changed from the beginning of the period to the end of the period.

Preferred stockholders ________.

Holland Corporation's annual report is as follows. Based on the information provided,find the rate of return on common stockholders' equity on March 31,2017.(Round your final answer two decimal places. )

Preferred Stock is included in the long-term asset section of the balance sheet.

If preferred stock is noncumulative,the company is required to pay dividends that were passed in previous years.

The 2017 balance for Mason Electronics reported the following items - with 2016 figures given for comparison: Net income for 2016 was $20,000.Compute the rate of return on common stockholders' equity for 2016.(Round your final answer to two decimal places. )

Which of the following corporate characteristics is a disadvantage of a corporation?

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

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

Which of the following occurs when a corporation distributes a stock dividend?

Preferred stock is stock ________.

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.

Which of the following statements is true?

Preferred stockholders receive a dividend preference over common stockholders.

ABC has 53,000 shares of $19.00 par common stock outstanding.ABC announces a stock split of 4-for-1.What is the effect of the split?

The statement of retained earnings reports how the company's retained earnings balance changed from the beginning of the period to the end of the period.

Preferred stockholders ________.

Holland Corporation's annual report is as follows. Based on the information provided,find the rate of return on common stockholders' equity on March 31,2017.(Round your final answer two decimal places. )

Preferred Stock is included in the long-term asset section of the balance sheet.

If preferred stock is noncumulative,the company is required to pay dividends that were passed in previous years.

The 2017 balance for Mason Electronics reported the following items - with 2016 figures given for comparison: Net income for 2016 was $20,000.Compute the rate of return on common stockholders' equity for 2016.(Round your final answer to two decimal places. )

Which of the following corporate characteristics is a disadvantage of a corporation?

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

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