Question 1

Define treasury stock and provide two reasons why a corporation would purchase treasury stock.

Accepted Answer

Treasury stock is a corporation's own st

Question 2

Occidental Produce,Inc.has 47,000 shares of common stock outstanding and 4,000 shares of preferred stock outstanding.The common stock is $0.06 par value;the preferred stock is 9% noncumulative with a $100.00 par value.On October 15,2017,the company declares a total dividend payment of $51,000.How much dividend will be paid to the preferred stockholders?

Accepted Answer

A) $51,000 
B) $24,000 
C) $36,000 
D) $2,820 
A) $51,000 
B) $24,000 
C) $36,000 
D) $2,820

Question 3

The par value of stock is ________.

Accepted Answer

A) the current selling price of stock 
B) the highest price for which a share can sell 
C) the price paid if the corporation purchases its own stock back 
D) the amount assigned by a company to a share of its stock 
A) the current selling price of stock 
B) the highest price for which a share can sell 
C) the price paid if the corporation purchases its own stock back 
D) the amount assigned by a company to a share of its stock

Question 4

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 5

Companies usually report their retained earnings restrictions on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 6

On December 1,2017,Arthur,Inc.had 43,000 shares of $9 par value common stock issued and outstanding.The next day it declared a 50% stock dividend.The market value of the stock on that date was $12 per share.Which of the following is the correct journal entry to record this transaction?

Accepted Answer

A) debit Stock Dividends $516,000 and credit Cash $516,000 
B) debit Stock Dividends $516,000,credit Common Stock $387,000,and credit Paid-In Capital in Excess of Par $129,000 
C) debit Common Stock $193,500 and credit Cash $193,500 
D) debit Stock Dividends $193,500 and credit Common Stock Dividend Distributable $193,500 
A) debit Stock Dividends $516,000 and credit Cash $516,000 
B) debit Stock Dividends $516,000,credit Common Stock $387,000,and credit Paid-In Capital in Excess of Par $129,000 
C) debit Common Stock $193,500 and credit Cash $193,500 
D) debit Stock Dividends $193,500 and credit Common Stock Dividend Distributable $193,500

Question 7

Outstanding stock represents shares of stock that ________.

Accepted Answer

A) are held by the stockholders 
B) are sold for the highest price 
C) have been authorized by state law 
D) have been issued but may or may not be held by stockholders 
A) are held by the stockholders 
B) are sold for the highest price 
C) have been authorized by state law 
D) have been issued but may or may not be held by stockholders

Question 8

The journal entry for the purchase of treasury stock includes a credit to Cash.

Accepted Answer

A) True 
 B)False

Question 9

Stephens,Inc.had 140,000 shares of $5 par value common stock issued and outstanding as of December 15,2016.The company is authorized to issue 1,000,000 common shares.On December 15,2016,Stephens declared a 40% stock dividend when the market value for its common stock was $9 per share.The stock was issued on Dec.30.
Prepare the journal entries to record the declaration and distribution of the stock dividend.Explanations are not required.Compute the total shares after the dividend.

Accepted Answer

The answer of Stephens,Inc.had 140,000 shares of $5 par value...

Question 10

Assume the following information for Petra Sales,Inc.:
• Common Stock,$1.00 par,202,000 shares issued,180,000 shares outstanding
• Paid-In Capital in Excess of Par-Common: $1,690,000
• Retained Earnings: $2,490,000
• Treasury Stock: 30,000 shares purchased at $13 per share
If Petra Sales purchases an additional 7,000 shares of treasury stock at $15 per share,what number of shares will be shown as issued and outstanding?

Accepted Answer

A) 15 issued;180,000 outstanding 
B) 195,000 issued;180,000 outstanding 
C) 202,000 issued;173,000 outstanding 
D) 202,000 issued;180,000 outstanding 
A) 15 issued;180,000 outstanding 
B) 195,000 issued;180,000 outstanding 
C) 202,000 issued;173,000 outstanding 
D) 202,000 issued;180,000 outstanding

Question 11

Madison Company earned net income of $75,000 during the year ended December 31,2016.On December 20,Madison declared the annual cash dividend on its 8% preferred stock (par value,$150,000)and a $0.50 per share cash dividend on its common stock (45,000 shares).Madison then paid the dividends on January 10,2017.
Prepare the journal entries to record the declaration and the distribution of the dividends.Explanations are not required.

Accepted Answer

The answer of Madison Company earned net income of $75,000...

Question 12

On June 30,2017,Rangers,Inc.showed the following data on the equity section of their balance sheet:
 
On July 1,2017,the company declared and distributed a 12% stock dividend.The market value of the stock at that time was $22 per share.Following this transaction,what is the number of shares issued?

Accepted Answer

A) 119,640 
B) 342,600 
C) 178,080 
D) 159,000 
A) 119,640 
B) 342,600 
C) 178,080 
D) 159,000

Question 13

On June 30,2017,Texas,Inc.showed the following data on the equity section of their balance sheet:
 
On July 1,2017,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) $768,060 
B) $952,000 
C) $983,220 
D) $617,800 
A) $768,060 
B) $952,000 
C) $983,220 
D) $617,800

Question 14

On November 1,2017,Pink Rose,Inc.declared a dividend of $3.00 per share.Pink Rose,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 30,2017.Provide the journal entry needed on November 30.

Accepted Answer

The answer of On November 1,2017,Pink Rose,Inc.declared a dividend of...

Question 15

Peterson,Inc.issued 4,000 shares of preferred stock for $280,000.The stock has a par value of $70 per share.The journal entry to record this transaction would ________.

Accepted Answer

A) credit Cash $280,000,debit Preferred Stock-$70 Par Value $4,000,and debit Paid-In Capital in Excess of Par-Preferred $276,000 
B) debit Cash $280,000,credit Preferred Stock-$70 Par Value $4,000,and credit Paid-In Capital in Excess of Par-Preferred $276,000 
C) credit Cash $280,000 and debit Preferred Stock-$70 Par Value $280,000 
D) debit Cash $280,000 and credit Preferred Stock-$70 Par Value $280,000 
A) credit Cash $280,000,debit Preferred Stock-$70 Par Value $4,000,and debit Paid-In Capital in Excess of Par-Preferred $276,000 
B) debit Cash $280,000,credit Preferred Stock-$70 Par Value $4,000,and credit Paid-In Capital in Excess of Par-Preferred $276,000 
C) credit Cash $280,000 and debit Preferred Stock-$70 Par Value $280,000 
D) debit Cash $280,000 and credit Preferred Stock-$70 Par Value $280,000

Question 16

Which of the following is a true statement?

Accepted Answer

A) Stockholders are guaranteed annual dividends. 
B) Stockholders receive their proportionate share of any assets remaining after the corporation pays its debts and liquidates. 
C) Stockholders may authorize a business contract on behalf of the corporation. 
D) Stockholders may determine the issue price of common stock. 
A) Stockholders are guaranteed annual dividends. 
B) Stockholders receive their proportionate share of any assets remaining after the corporation pays its debts and liquidates. 
C) Stockholders may authorize a business contract on behalf of the corporation. 
D) Stockholders may determine the issue price of common stock.

Question 17

Prior period adjustments ________.

Accepted Answer

A) always increase the beginning balance of retained earnings 
B) are shown on the statement of retained earnings as corrections to the beginning balance 
C) can be ignored because the financial statements have already been issued 
D) must be recorded in the period in which the error occurred 
A) always increase the beginning balance of retained earnings 
B) are shown on the statement of retained earnings as corrections to the beginning balance 
C) can be ignored because the financial statements have already been issued 
D) must be recorded in the period in which the error occurred

Question 18

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 19

Carpenter Schools,Inc.is authorized to issue 500,000 shares of $2 par common stock.The company issued 106,000 shares at $6 per share.When the market price of common stock was $10 per share,Carpenter declared and distributed a 10% stock dividend.Later,Carpenter declared and paid a $0.10 per share cash dividend.
Prepare the journal entries to record these transactions.Explanations are not required.

Accepted Answer

The answer of Carpenter Schools,Inc.is authorized to issue 500,000 shares...

Question 20

In the event of a corporate liquidation,preferred stockholders ________.

Accepted Answer

A) are guaranteed to receive a full refund of the stock purchase price 
B) have first claim on remaining corporate assets after debts are paid 
C) are guaranteed to receive the par value of the preferred stock 
D) may retain their proportionate share of voting rights 
A) are guaranteed to receive a full refund of the stock purchase price 
B) have first claim on remaining corporate assets after debts are paid 
C) are guaranteed to receive the par value of the preferred stock 
D) may retain their proportionate share of voting rights

Define treasury stock and provide two reasons why a corporation would purchase treasury stock.

The par value of stock is ________.

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

Companies usually report their retained earnings restrictions on the balance sheet.

On December 1,2017,Arthur,Inc.had 43,000 shares of $9 par value common stock issued and outstanding.The next day it declared a 50% stock dividend.The market value of the stock on that date was $12 per share.Which of the following is the correct journal entry to record this transaction?

Outstanding stock represents shares of stock that ________.

The journal entry for the purchase of treasury stock includes a credit to Cash.

On June 30,2017,Rangers,Inc.showed the following data on the equity section of their balance sheet: On July 1,2017,the company declared and distributed a 12% stock dividend.The market value of the stock at that time was $22 per share.Following this transaction,what is the number of shares issued?

On November 1,2017,Pink Rose,Inc.declared a dividend of $3.00 per share.Pink Rose,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 30,2017.Provide the journal entry needed on November 30.

Peterson,Inc.issued 4,000 shares of preferred stock for $280,000.The stock has a par value of $70 per share.The journal entry to record this transaction would ________.

Which of the following is a true statement?

Prior period adjustments ________.

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

In the event of a corporate liquidation,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

Filters

Exam 13: Corporations

Define treasury stock and provide two reasons why a corporation would purchase treasury stock.

The par value of stock is ________.

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

Companies usually report their retained earnings restrictions on the balance sheet.

On December 1,2017,Arthur,Inc.had 43,000 shares of $9 par value common stock issued and outstanding.The next day it declared a 50% stock dividend.The market value of the stock on that date was $12 per share.Which of the following is the correct journal entry to record this transaction?

Outstanding stock represents shares of stock that ________.

The journal entry for the purchase of treasury stock includes a credit to Cash.

On June 30,2017,Rangers,Inc.showed the following data on the equity section of their balance sheet: On July 1,2017,the company declared and distributed a 12% stock dividend.The market value of the stock at that time was $22 per share.Following this transaction,what is the number of shares issued?

On November 1,2017,Pink Rose,Inc.declared a dividend of $3.00 per share.Pink Rose,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 30,2017.Provide the journal entry needed on November 30.

Peterson,Inc.issued 4,000 shares of preferred stock for $280,000.The stock has a par value of $70 per share.The journal entry to record this transaction would ________.

Which of the following is a true statement?

Prior period adjustments ________.

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

In the event of a corporate liquidation,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

Filters