Question 1

The purchase of treasury stock returns ________ to the stockholders but also ________.

Accepted Answer

A) stock;increases their ownership of the company. 
B) stock;decreases their ownership of the company. 
C) cash;increases their ownership of the company. 
D) cash;decreases their ownership of the company. 
A) stock;increases their ownership of the company. 
B) stock;decreases their ownership of the company. 
C) cash;increases their ownership of the company. 
D) cash;decreases their ownership of the company.

Question 2

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

Accepted Answer

A) 0.38 
B) 5.00 
C) 0.80 
D) 3.50 
A) 0.38 
B) 5.00 
C) 0.80 
D) 3.50

Question 3

Mr.Seider,a shareholder in the Greenfield Corporation,owns 2000 shares of their common stock,which represents 24% of the outstanding common stock of Greenfield Corporation.Mr.Seider receives a 5% stock dividend.After the stock dividend,what is Mr.Seider's ownership in Greenfield Corporation's common stock?

Accepted Answer

A) 5% ownership 
B) 19% ownership 
C) 24% ownership 
D) 29% ownership 
A) 5% ownership 
B) 19% ownership 
C) 24% ownership 
D) 29% ownership

Question 4

Reasons that a company would purchase treasury stock include all of the following EXCEPT:

Accepted Answer

A) management wants to avoid a takeover by an outside party. 
B) it needs the stock for distribution to employees under stock purchase plans. 
C) it wants to increase net assets by buying its stock low and reselling it at a higher price. 
D) management wants to decrease earnings per share of common stock. 
A) management wants to avoid a takeover by an outside party. 
B) it needs the stock for distribution to employees under stock purchase plans. 
C) it wants to increase net assets by buying its stock low and reselling it at a higher price. 
D) management wants to decrease earnings per share of common stock.

Question 5

If a corporation issues 10,000 shares of $1 par value common stock for $9000,the journal entry would include a credit to:

Accepted Answer

A) Common Stock for $9000. 
B) Paid-in Capital in Excess of Par-Common for $9000. 
C) Common Stock for $10,000. 
D) Retained Earnings for $10,000. 
A) Common Stock for $9000. 
B) Paid-in Capital in Excess of Par-Common for $9000. 
C) Common Stock for $10,000. 
D) Retained Earnings for $10,000.

Question 6

For cash dividends,the journal entry on the date of record is:

Accepted Answer

A) non-existent.No journal entry is required on the date of record. 
B) debit Retained Earnings and credit Dividends Payable. 
C) debit Dividends and credit Cash. 
D) debit Dividends Payable and credit Cash. 
A) non-existent.No journal entry is required on the date of record. 
B) debit Retained Earnings and credit Dividends Payable. 
C) debit Dividends and credit Cash. 
D) debit Dividends Payable and credit Cash.

Question 7

How does the declaration and payment of cash dividends affect the accounting equation?

Accepted Answer

A) increase assets and stockholders' equity 
B) decrease assets and stockholders' equity 
C) increase assets and decrease stockholders' equity 
D) decrease assets and increase stockholders' equity 
A) increase assets and stockholders' equity 
B) decrease assets and stockholders' equity 
C) increase assets and decrease stockholders' equity 
D) decrease assets and increase stockholders' equity

Question 8

A company issues 1,000,000 shares of $0.90 par value,cumulative preferred stock for $16,000,000.The stated dividend is $1 per share.Which journal entry is needed for the sale?

Accepted Answer

A) debit Cash $16,000,000 and credit Preferred Stock $16,000,000 
B) debit Cash $16,000,000,credit Preferred Stock $1,300,000 and credit Paid-in Capital in Excess of Par-Preferred $14,700,000 
C) debit Cash $16,000,000 and credit Paid-in Capital in Excess of Par-Preferred $16,000,000 
D) debit Cash $16,000,000 and credit Retained Earnings $16,000,000 
A) debit Cash $16,000,000 and credit Preferred Stock $16,000,000 
B) debit Cash $16,000,000,credit Preferred Stock $1,300,000 and credit Paid-in Capital in Excess of Par-Preferred $14,700,000 
C) debit Cash $16,000,000 and credit Paid-in Capital in Excess of Par-Preferred $16,000,000 
D) debit Cash $16,000,000 and credit Retained Earnings $16,000,000

Question 9

Preferred stock is NOT similar to debt because:

Accepted Answer

A) preferred dividends are not tax-deductible whereas interest expense is tax-deductible. 
B) preferred dividends do not have to be paid whereas interest expense must be paid. 
C) preferred stock does not have a maturity date whereas debt usually has a maturity date. 
D) all of the above. 
A) preferred dividends are not tax-deductible whereas interest expense is tax-deductible. 
B) preferred dividends do not have to be paid whereas interest expense must be paid. 
C) preferred stock does not have a maturity date whereas debt usually has a maturity date. 
D) all of the above.

Question 10

Zeman,Inc.declares and distributes a 10% common stock dividend when it has 30,000 shares of $10 par value common stock outstanding.If the market value of the common stock is $30,the journal entry to record the stock dividend would include a:

Accepted Answer

A) credit to Common Stock $120,000. 
B) credit to Common Stock $60,000. 
C) credit to Paid-in Capital in Excess of Par-Common $60,000. 
D) credit to Paid-in Capital in Excess of Par-Common $30,000. 
A) credit to Common Stock $120,000. 
B) credit to Common Stock $60,000. 
C) credit to Paid-in Capital in Excess of Par-Common $60,000. 
D) credit to Paid-in Capital in Excess of Par-Common $30,000.

Question 11

On February 1,a corporation has 40,000 shares of $1 par value common stock issued and outstanding.The corporation also has Additional Paid-in Capital of $200,000 and Retained Earnings of $200,000.On February 1,the corporation declared a 2-for-1 stock split.After the split,what is the total par value of the common stock and the total stockholders' equity,respectively?

Accepted Answer

A) $80,000;$440,000 
B) $40,000;$440,000 
C) $20,000;$440,000 
D) $40,000;$240,000 
A) $80,000;$440,000 
B) $40,000;$440,000 
C) $20,000;$440,000 
D) $40,000;$240,000

The purchase of treasury stock returns to the stockholders but also .

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

Reasons that a company would purchase treasury stock include all of the following EXCEPT:

If a corporation issues 10,000 shares of $1 par value common stock for $9000,the journal entry would include a credit to:

For cash dividends,the journal entry on the date of record is:

How does the declaration and payment of cash dividends affect the accounting equation?

A company issues 1,000,000 shares of $0.90 par value,cumulative preferred stock for $16,000,000.The stated dividend is $1 per share.Which journal entry is needed for the sale?

Preferred stock is NOT similar to debt because:

Zeman,Inc.declares and distributes a 10% common stock dividend when it has 30,000 shares of $10 par value common stock outstanding.If the market value of the common stock is $30,the journal entry to record the stock dividend would include a:

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

The purchase of treasury stock returns ________ to the stockholders but also ________.

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

Reasons that a company would purchase treasury stock include all of the following EXCEPT:

If a corporation issues 10,000 shares of $1 par value common stock for $9000,the journal entry would include a credit to:

For cash dividends,the journal entry on the date of record is:

How does the declaration and payment of cash dividends affect the accounting equation?

A company issues 1,000,000 shares of $0.90 par value,cumulative preferred stock for $16,000,000.The stated dividend is $1 per share.Which journal entry is needed for the sale?

Preferred stock is NOT similar to debt because:

Zeman,Inc.declares and distributes a 10% common stock dividend when it has 30,000 shares of $10 par value common stock outstanding.If the market value of the common stock is $30,the journal entry to record the stock dividend would include a:

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

The purchase of treasury stock returns to the stockholders but also .