Question 1

Earnings per share is calculated as net income plus preferred dividends divided by the average number of common shares outstanding.

Accepted Answer

A) True 
 B)False

Question 2

Cash dividends and stock splits decrease the Retained Earnings account.

Accepted Answer

A) True 
 B)False

Question 3

Dalmatian Corporation's annual report is as follows.
 
If the current market price is $19 on March 31,2016,compute the price/earnings ratio on March 31,2017.(Round any intermediate calculations and your final answer to the nearest cent. )

Accepted Answer

A) 10.50 
B) 2.13 
C) 1.81 
D) 8.92 
A) 10.50 
B) 2.13 
C) 1.81 
D) 8.92

Question 4

Which of the following occurs when the board of directors declares a 3-for-1 stock split on 17,000 outstanding shares of $24 par common stock?

Accepted Answer

A) The par value of the stock remains the same. 
B) The par value of the stock increases to $48 per share. 
C) The number of outstanding shares remains at 17,000. 
D) The number of outstanding shares increases to 51,000. 
A) The par value of the stock remains the same. 
B) The par value of the stock increases to $48 per share. 
C) The number of outstanding shares remains at 17,000. 
D) The number of outstanding shares increases to 51,000.

Question 5

On December 2,2017,St.Augustine,Inc.purchases land.In exchange for the land,St.Augustine,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.

Accepted Answer

The answer of On December 2,2017,St.Augustine,Inc.purchases land.In exchange for the...

Question 6

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

Question 7

Which of the following is an advantage of the corporate form of business?

Accepted Answer

A) less degree of government regulation 
B) limited liability of stockholders 
C) separation of ownership and management 
D) low start-up costs 
A) less degree of government regulation 
B) limited liability of stockholders 
C) separation of ownership and management 
D) low start-up costs

Question 8

On the date of record for a dividend,the company ________.

Accepted Answer

A) issues new shares of stock on that date 
B) disburses dividend payments to stockholders on that date 
C) records the dividend payable amount on that date 
D) determines who owns the shares of stock on that date 
A) issues new shares of stock on that date 
B) disburses dividend payments to stockholders on that date 
C) records the dividend payable amount on that date 
D) determines who owns the shares of stock on that date

Question 9

The following information is from the December 31,2017 balance sheet of Lawson Corporation.
 
What was the average issue price of the common stock shares? (Round your answer to the nearest cent. )

Accepted Answer

A) $1.85 
B) $1.00 
C) $2.17 
D) $3.17 
A) $1.85 
B) $1.00 
C) $2.17 
D) $3.17

Question 10

Which of the following occurs when a corporation's board of directors declares a 10% stock dividend?

Accepted Answer

A) Stock Dividends will be credited for the new shares times the current market value of the stock. 
B) Stock Dividends will be debited for the new shares times the current market value of the stock. 
C) Stock Dividends will be debited for the new shares times the par value of the stock. 
D) Stock Dividends will be credited for the new shares times the par value of the stock. 
A) Stock Dividends will be credited for the new shares times the current market value of the stock. 
B) Stock Dividends will be debited for the new shares times the current market value of the stock. 
C) Stock Dividends will be debited for the new shares times the par value of the stock. 
D) Stock Dividends will be credited for the new shares times the par value of the stock.

Question 11

William Smith is a sole proprietor of a successful business.He is interested in incorporating to protect his personal assets.What are some disadvantages of organizing as a corporate entity?

Accepted Answer

Some disadvantages of organizing as a co

Question 12

Stock dividends are declared by the ________.

Accepted Answer

A) chief financial officer of the company 
B) board of directors of the company 
C) chief executive officer of the company 
D) stockholders of the company 
A) chief financial officer of the company 
B) board of directors of the company 
C) chief executive officer of the company 
D) stockholders of the company

Question 13

Stock dividends are distributed to stockholders in proportion to the number of shares that stockholders already own.

Accepted Answer

A) True 
 B)False

Question 14

Thomas Business Supply reported a negative amount in Retained Earnings.What term describes this negative amount? What can cause this to happen?

Accepted Answer

A negative balance in Retained

Question 15

Small stock dividends increase the Paid-In Capital in Excess of Par account.

Accepted Answer

A) True 
 B)False

Question 16

Comment on how an investor would use each of the following ratios to evaluate business performance.

Accepted Answer

The answer of Comment on how an investor would use...

Question 17

A company originally issued 20,000 shares of $9 par value common stock at $13 per share.The board of directors declares an 9% stock dividend when the market price of the stock is $24 a share.Which of the following is included in the entry to record the declaration of a stock dividend?

Accepted Answer

A) Stock Dividends is debited for $21,600. 
B) Common Stock-$9 Par Value is credited for $41,400. 
C) Common Stock is credited for $43,200. 
D) Stock Dividends is debited for $43,200. 
A) Stock Dividends is debited for $21,600. 
B) Common Stock-$9 Par Value is credited for $41,400. 
C) Common Stock is credited for $43,200. 
D) Stock Dividends is debited for $43,200.

Question 18

The purchase of treasury stock ________.

Accepted Answer

A) decreases assets and stockholders' equity 
B) increases assets and stockholders' equity 
C) increases assets and decreases stockholders' equity 
D) decreases assets and increases stockholders' equity 
A) decreases assets and stockholders' equity 
B) increases assets and stockholders' equity 
C) increases assets and decreases stockholders' equity 
D) decreases assets and increases stockholders' equity

Question 19

For no-par stock there can be paid-in capital in excess of par.

Accepted Answer

A) True 
 B)False

Question 20

Pearland,Inc.has 8,000 shares of preferred stock outstanding.The preferred stock has a $90 par value,a 13% dividend rate,and is noncumulative.If Pearland has sufficient funds to pay dividends,what is the total amount of dividends that will be paid out to preferred stockholders?

Accepted Answer

A) $34,615 
B) $93,600 
C) $55,385 
D) $7,200 
A) $34,615 
B) $93,600 
C) $55,385 
D) $7,200

Exam 13: Corporations

Earnings per share is calculated as net income plus preferred dividends divided by the average number of common shares outstanding.

Cash dividends and stock splits decrease the Retained Earnings account.

Dalmatian Corporation's annual report is as follows. If the current market price is $19 on March 31,2016,compute the price/earnings ratio on March 31,2017.(Round any intermediate calculations and your final answer to the nearest cent. )

Which of the following occurs when the board of directors declares a 3-for-1 stock split on 17,000 outstanding shares of $24 par common stock?

On December 2,2017,St.Augustine,Inc.purchases land.In exchange for the land,St.Augustine,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.

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

Which of the following is an advantage of the corporate form of business?

On the date of record for a dividend,the company ________.

The following information is from the December 31,2017 balance sheet of Lawson Corporation. What was the average issue price of the common stock shares? (Round your answer to the nearest cent. )

Which of the following occurs when a corporation's board of directors declares a 10% stock dividend?

William Smith is a sole proprietor of a successful business.He is interested in incorporating to protect his personal assets.What are some disadvantages of organizing as a corporate entity?

Stock dividends are declared by the ________.

Stock dividends are distributed to stockholders in proportion to the number of shares that stockholders already own.

Thomas Business Supply reported a negative amount in Retained Earnings.What term describes this negative amount? What can cause this to happen?

Small stock dividends increase the Paid-In Capital in Excess of Par account.

Comment on how an investor would use each of the following ratios to evaluate business performance.

A company originally issued 20,000 shares of $9 par value common stock at $13 per share.The board of directors declares an 9% stock dividend when the market price of the stock is $24 a share.Which of the following is included in the entry to record the declaration of a stock dividend?

The purchase of treasury stock ________.

For no-par stock there can be paid-in capital in excess of par.

Pearland,Inc.has 8,000 shares of preferred stock outstanding.The preferred stock has a $90 par value,a 13% dividend rate,and is noncumulative.If Pearland has sufficient funds to pay dividends,what is the total amount of dividends that will be paid out to preferred stockholders?

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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