Question 1

Which of the following statements regarding treasury stock is CORRECT?

Accepted Answer

A) Treasury Stock is reported beneath the Retained Earnings account on the balance sheet as a positive amount. 
B) If the amounts received from resale of treasury stock are less than amounts originally paid,the difference is shown on the income statement as a loss on treasury stock transactions. 
C) Treasury stock is recorded as an asset at the stock's market value on the date of purchase. 
D) Repurchasing treasury stock provides a way for public companies to return cash to shareholders other than through dividends. 
A) Treasury Stock is reported beneath the Retained Earnings account on the balance sheet as a positive amount. 
B) If the amounts received from resale of treasury stock are less than amounts originally paid,the difference is shown on the income statement as a loss on treasury stock transactions. 
C) Treasury stock is recorded as an asset at the stock's market value on the date of purchase. 
D) Repurchasing treasury stock provides a way for public companies to return cash to shareholders other than through dividends. D

Question 2

The difference between the issue price per share of common stock and the par value per share of the stock is credited to:

Accepted Answer

A) Retained Earnings. 
B) Common Stock. 
C) Paid-in Capital in Excess of Par-Common. 
D) Goodwill. 
A) Retained Earnings. 
B) Common Stock. 
C) Paid-in Capital in Excess of Par-Common. 
D) Goodwill. C

Question 3

The journal entry to record common stock issued at its par value includes a credit to:

Accepted Answer

A) Paid-in Capital-Par Value. 
B) Common Stock. 
C) Paid-in Capital in Excess of Par-Common. 
D) Retained Earnings. 
A) Paid-in Capital-Par Value. 
B) Common Stock. 
C) Paid-in Capital in Excess of Par-Common. 
D) Retained Earnings. B

Question 4

The purchase of treasury stock by a corporation increases total assets and stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 5

Johnson Corporation had the following transactions:
1.Issued 7,000 shares of no-par common stock with a stated value of $15 per share for $155,000.
2.Issued 3,000 shares of $100 par value preferred stock at $117 per share for cash.
Required:
Prepare the journal entries for the above transactions.Omit explanations.

Accepted Answer

The answer of Johnson Corporation had the following transactions:
1.Issued 7,000...

Question 6

Amber Corporation purchases 40,000 shares of its own $20 par value common stock for $80 per share.What will be the effect on stockholders' equity?

Accepted Answer

A) increase $800,000 
B) increase $3,200,000 
C) decrease $800,000 
D) decrease $3,200,000 
A) increase $800,000 
B) increase $3,200,000 
C) decrease $800,000 
D) decrease $3,200,000

Question 7

Miller Corporation issued 6000 shares of its $5 par value common stock in payment for attorney services billed at $54,000.Miller Corporation's stock has been actively trading at $9 per share.The journal entry for this transaction would include a credit to:

Accepted Answer

A) Paid-in Capital in Excess of Par-Common for $54,000. 
B) Paid-in Capital in Excess of Par-Common for $24,000. 
C) Legal Expense for $54,000. 
D) Common Stock for $54,000. 
A) Paid-in Capital in Excess of Par-Common for $54,000. 
B) Paid-in Capital in Excess of Par-Common for $24,000. 
C) Legal Expense for $54,000. 
D) Common Stock for $54,000.

Question 8

Burkert Company has 50,000 shares of $1 par value common stock issued and outstanding.The company also has 5000 shares of $100 par value,6% cumulative preferred stock outstanding.Burkert did not pay the preferred dividends in 2018 and 2019.For the common stockholders to receive a dividend in 2020,the board of directors must declare dividends in excess of:

Accepted Answer

A) $30,000. 
B) $60,000. 
C) $90,000. 
D) $120,000. 
A) $30,000. 
B) $60,000. 
C) $90,000. 
D) $120,000.

Question 9

When 200 shares of $1 par value Common Stock are issued at $28 per share,Paid-in Capital in Excess of Par-Common will:

Accepted Answer

A) increase $200. 
B) decrease $5600. 
C) increase $5400. 
D) stay the same. 
A) increase $200. 
B) decrease $5600. 
C) increase $5400. 
D) stay the same.

Question 10

A share of 5% preferred stock has a par value of $30 and market value of $100.The owners of the preferred stock will receive a cash dividend of: (Round your answer to the nearest cent. )

Accepted Answer

A) $1.50 per share. 
B) $70 per share. 
C) $5.00 per share. 
D) $30.00 per share. 
A) $1.50 per share. 
B) $70 per share. 
C) $5.00 per share. 
D) $30.00 per share.

Question 11

List three reasons why corporations purchase their own stock.

Accepted Answer

1.The company has issued all its authori

Question 12

A stockholder has the right to vote in the election of the board of directors.

Accepted Answer

A) True 
 B)False

Question 13

The arbitrary amount assigned by a company to a share of its stock is the:

Accepted Answer

A) stated value per share. 
B) par value per share. 
C) book value per share. 
D) A and B 
A) stated value per share. 
B) par value per share. 
C) book value per share. 
D) A and B

Question 14

On December 31,Clorine Corporation has the following data available:   What is return on assets? (Round your final answer to two decimal places,X.XX%)

Accepted Answer

A) 25.32% 
B) 27.85% 
C) 42.31% 
D) 34.62% 
A) 25.32% 
B) 27.85% 
C) 42.31% 
D) 34.62%

Question 15

On December 31,Sulfur Corporation has the following data available:   What is the earnings per share? (Round the final answer to two decimal places.)

Accepted Answer

A) 1.86 
B) 2.57 
C) 5.20 
D) 0.54 
A) 1.86 
B) 2.57 
C) 5.20 
D) 0.54

Question 16

Before a company can pay dividends to the common stockholders,the owners of cumulative preferred stock must receive:

Accepted Answer

A) the current year's dividends,but not dividends in arrears. 
B) neither the current year's dividends nor dividends in arrears. 
C) all dividends in arrears plus the current year's dividends. 
D) all dividends in arrears,but not the current year's dividends. 
A) the current year's dividends,but not dividends in arrears. 
B) neither the current year's dividends nor dividends in arrears. 
C) all dividends in arrears plus the current year's dividends. 
D) all dividends in arrears,but not the current year's dividends.

Question 17

Which statement is FALSE?

Accepted Answer

A) Preferred stockholders receive dividends before the common stockholders only if the preferred stock is cumulative. 
B) Preferred stockholders receive dividends before the common stockholders. 
C) Preferred stockholders receive assets before the common stockholders if the corporation liquidates. 
D) Preferred stockholders have the same basic four rights as common stockholders,unless a right is taken away. 
A) Preferred stockholders receive dividends before the common stockholders only if the preferred stock is cumulative. 
B) Preferred stockholders receive dividends before the common stockholders. 
C) Preferred stockholders receive assets before the common stockholders if the corporation liquidates. 
D) Preferred stockholders have the same basic four rights as common stockholders,unless a right is taken away.

Question 18

If a corporation issues 5000 shares of $5 par value common stock for $85,000,the journal entry would include a credit to:

Accepted Answer

A) Common Stock for $85,000. 
B) Paid-in Capital in Excess of Par-Common for $85,000. 
C) Common Stock for $60,000. 
D) Paid-in Capital in Excess of Par-Common for $60,000. 
A) Common Stock for $85,000. 
B) Paid-in Capital in Excess of Par-Common for $85,000. 
C) Common Stock for $60,000. 
D) Paid-in Capital in Excess of Par-Common for $60,000.

Question 19

Nichols,Inc.has 1000 shares of 4%,$100 par value,cumulative preferred stock and 75,000 shares of $1 par value common stock outstanding at December 31 of the current year.What is the annual dividend that will be paid to the preferred stockholders?

Accepted Answer

A) $1000 
B) $4000 
C) $100,000 
D) $0.Preferred stockholders are not guaranteed an annual dividend payment. 
A) $1000 
B) $4000 
C) $100,000 
D) $0.Preferred stockholders are not guaranteed an annual dividend payment.

Question 20

If a corporation declares a $100,000 cash dividend,the account to be debited on the date of declaration is:

Accepted Answer

A) Common Stock. 
B) Dividends Payable. 
C) Retained Earnings or Dividends. 
D) Paid-in Capital in Excess of Par. 
A) Common Stock. 
B) Dividends Payable. 
C) Retained Earnings or Dividends. 
D) Paid-in Capital in Excess of Par.

Which of the following statements regarding treasury stock is CORRECT?

The difference between the issue price per share of common stock and the par value per share of the stock is credited to:

The journal entry to record common stock issued at its par value includes a credit to:

The purchase of treasury stock by a corporation increases total assets and stockholders' equity.

Amber Corporation purchases 40,000 shares of its own $20 par value common stock for $80 per share.What will be the effect on stockholders' equity?

Miller Corporation issued 6000 shares of its $5 par value common stock in payment for attorney services billed at $54,000.Miller Corporation's stock has been actively trading at $9 per share.The journal entry for this transaction would include a credit to:

When 200 shares of $1 par value Common Stock are issued at $28 per share,Paid-in Capital in Excess of Par-Common will:

A share of 5% preferred stock has a par value of $30 and market value of $100.The owners of the preferred stock will receive a cash dividend of: (Round your answer to the nearest cent. )

List three reasons why corporations purchase their own stock.

A stockholder has the right to vote in the election of the board of directors.

The arbitrary amount assigned by a company to a share of its stock is the:

On December 31,Clorine Corporation has the following data available: What is return on assets? (Round your final answer to two decimal places,X.XX%)

On December 31,Sulfur Corporation has the following data available: What is the earnings per share? (Round the final answer to two decimal places.)

Before a company can pay dividends to the common stockholders,the owners of cumulative preferred stock must receive:

Which statement is FALSE?

If a corporation issues 5000 shares of $5 par value common stock for $85,000,the journal entry would include a credit to:

Nichols,Inc.has 1000 shares of 4%,$100 par value,cumulative preferred stock and 75,000 shares of $1 par value common stock outstanding at December 31 of the current year.What is the annual dividend that will be paid to the preferred stockholders?

If a corporation declares a $100,000 cash dividend,the account to be debited on the date of declaration is:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 10: Stockholders Equity

Which of the following statements regarding treasury stock is CORRECT?

The difference between the issue price per share of common stock and the par value per share of the stock is credited to:

The journal entry to record common stock issued at its par value includes a credit to:

The purchase of treasury stock by a corporation increases total assets and stockholders' equity.

Amber Corporation purchases 40,000 shares of its own $20 par value common stock for $80 per share.What will be the effect on stockholders' equity?

Miller Corporation issued 6000 shares of its $5 par value common stock in payment for attorney services billed at $54,000.Miller Corporation's stock has been actively trading at $9 per share.The journal entry for this transaction would include a credit to:

When 200 shares of $1 par value Common Stock are issued at $28 per share,Paid-in Capital in Excess of Par-Common will:

A share of 5% preferred stock has a par value of $30 and market value of $100.The owners of the preferred stock will receive a cash dividend of: (Round your answer to the nearest cent. )

List three reasons why corporations purchase their own stock.

A stockholder has the right to vote in the election of the board of directors.

The arbitrary amount assigned by a company to a share of its stock is the:

On December 31,Clorine Corporation has the following data available: What is return on assets? (Round your final answer to two decimal places,X.XX%)

On December 31,Sulfur Corporation has the following data available: What is the earnings per share? (Round the final answer to two decimal places.)

Before a company can pay dividends to the common stockholders,the owners of cumulative preferred stock must receive:

Which statement is FALSE?

If a corporation issues 5000 shares of $5 par value common stock for $85,000,the journal entry would include a credit to:

Nichols,Inc.has 1000 shares of 4%,$100 par value,cumulative preferred stock and 75,000 shares of $1 par value common stock outstanding at December 31 of the current year.What is the annual dividend that will be paid to the preferred stockholders?

If a corporation declares a $100,000 cash dividend,the account to be debited on the date of declaration is:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters