Question 1

What is the total stockholders' equity based on the following account balances?

Accepted Answer

A)  $670,000 
B)  $655,000 
C)  $640,000 
D)  $565,000 
A)  $670,000 
B)  $655,000 
C)  $640,000 
D)  $565,000

Question 2

A restriction/appropriation of retained earnings establishes cash assets that are set aside for a specific purpose.

Accepted Answer

A) True 
 B)False

Question 3

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends:   Determine the dividends per share for preferred and common stock for the second year.

Accepted Answer

A)  $2.25 and $0.00 
B)  $2.25 and $0.45 
C)  $0.00 and $0.45 
D)  $2.00 and $0.45 
A)  $2.25 and $0.00 
B)  $2.25 and $0.45 
C)  $0.00 and $0.45 
D)  $2.00 and $0.45

Question 4

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends:   Determine the dividends in arrears for preferred stock for the second year.

Accepted Answer

A)  $25,000 
B)  $10,000 
C)  $0 
D)  $30,000 
A)  $25,000 
B)  $10,000 
C)  $0 
D)  $30,000

Question 5

A company had the following stockholders equity information available at year end.
- issued 11,000 shares of $2.00 par value common stock for $12.00 per share
- issued 5,000 shares of $50 par value 6% preferred stock for $70 per share
- purchased 1,000 shares of previously issued common stock for $15.00 per share
-reported net income of $200,000
- declared and paid the preferred stock dividend
Calculate the earnings per share for the current year.

Accepted Answer

($200,000 - $15,000)

Question 6

Which of the following is the appropriate general journal entry to record the declaration of a cash dividends?

Accepted Answer

A) 
  
B) 
  
C)  
  
D) 
  
A) 
  
B) 
  
C)  
  
D)

Question 7

The reduction of par or stated value of stock by issuance of a proportionate number of additional shares is termed a

Accepted Answer

A)  liquidating dividend 
B)  stock split 
C)  stock option 
D)  preferred dividend 
A)  liquidating dividend 
B)  stock split 
C)  stock option 
D)  preferred dividend

Question 8

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 40,000 shares were originally issued and 10,000 were subsequently reacquired. What is the number of shares outstanding?

Accepted Answer

A)  10,000 
B)  40,000 
C)  30,000 
D)  50,000 
A)  10,000 
B)  40,000 
C)  30,000 
D)  50,000

Question 9

On April 2nd a corporation purchased for cash 5,000 shares of its own $10 par common stock at $16 a share. They sold 3,000 of the treasury shares at $19 a share on June 15th. The remaining 2,000 shares were sold on November 10th for $12 a share.

Accepted Answer

(a) April

Question 10

Stockholders' equity

Accepted Answer

A)  is usually equal to cash on hand 
B)  includes paid-in capital and liabilities 
C)  includes retained earnings and paid-in capital 
D)  is shown on the income statement 
A)  is usually equal to cash on hand 
B)  includes paid-in capital and liabilities 
C)  includes retained earnings and paid-in capital 
D)  is shown on the income statement

Question 11

The amount of a corporation's retained earnings that has been restricted/appropriated should be reported in the notes to the financial statements.

Accepted Answer

A) True 
 B)False

Question 12

The primary purpose of a stock split is to

Accepted Answer

A)  increase paid-in capital 
B)  reduce the market price of the stock per share 
C)  increase the market price of the stock per share 
D)  increase retained earnings 
A)  increase paid-in capital 
B)  reduce the market price of the stock per share 
C)  increase the market price of the stock per share 
D)  increase retained earnings

Question 13

On February 1 of the current year, Motor, Inc. issued 700 shares of $2 par common stock to an attorney in return for preparing and filing the Articles of Incorporation. The value of the services is $9,600. Journalize this transaction.

Accepted Answer

The answer of On February 1 of the current year,...

Question 14

If the dividend amount of preferred stock, $50 par value, is quoted as 8%, then the dividends per share would be $4.

Accepted Answer

A) True 
 B)False

Question 15

Indicate whether the following actions would (+) increase, (-) decrease, or (0) not affect a company's total assets, liabilities, and stockholders' equity.

Accepted Answer

The answer of Indicate whether the following actions would (+)...

Question 16

The reduction in the par or stated value of common stock, accompanied by the issuance of a proportionate number of additional shares, is called a stock split.

Accepted Answer

A) True 
 B)False

Question 17

Significant changes in stockholders' equity are reported in

Accepted Answer

A)  income statement 
B)  retained earnings statement 
C)  statement of stockholders' equity 
D)  statement of cash flows 
A)  income statement 
B)  retained earnings statement 
C)  statement of stockholders' equity 
D)  statement of cash flows

Question 18

The two main sources of stockholders' equity are investments contributed by stockholders and net income retained in the business.

Accepted Answer

A) True 
 B)False

Question 19

A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8. Subsequently, the company declared a 2% stock dividend on a date when the market price was $11 a share. What is the amount transferred from the retained earnings account to paid-in capital accounts as a result of the stock dividend?

Accepted Answer

A)  $3,200 
B)  $6,400 
C)  $4,800 
D)  $8,800 
A)  $3,200 
B)  $6,400 
C)  $4,800 
D)  $8,800

Question 20

Which of the following would appear as a prior-period adjustment?

Accepted Answer

A)  loss resulting from the sale of fixed assets 
B)  difference between the actual and estimated uncollectible accounts receivable 
C)  error in the computation of depreciation expense in the preceding year 
D)  loss from the restructuring of assets 
A)  loss resulting from the sale of fixed assets 
B)  difference between the actual and estimated uncollectible accounts receivable 
C)  error in the computation of depreciation expense in the preceding year 
D)  loss from the restructuring of assets

Exam 11: Corporations: Organization, Stock Transactions, and Dividends

What is the total stockholders' equity based on the following account balances?

A restriction/appropriation of retained earnings establishes cash assets that are set aside for a specific purpose.

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends: Determine the dividends per share for preferred and common stock for the second year.

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends: Determine the dividends in arrears for preferred stock for the second year.

Which of the following is the appropriate general journal entry to record the declaration of a cash dividends?

The reduction of par or stated value of stock by issuance of a proportionate number of additional shares is termed a

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 40,000 shares were originally issued and 10,000 were subsequently reacquired. What is the number of shares outstanding?

On April 2nd a corporation purchased for cash 5,000 shares of its own $10 par common stock at $16 a share. They sold 3,000 of the treasury shares at $19 a share on June 15th. The remaining 2,000 shares were sold on November 10th for $12 a share.

Stockholders' equity

The amount of a corporation's retained earnings that has been restricted/appropriated should be reported in the notes to the financial statements.

The primary purpose of a stock split is to

On February 1 of the current year, Motor, Inc. issued 700 shares of $2 par common stock to an attorney in return for preparing and filing the Articles of Incorporation. The value of the services is $9,600. Journalize this transaction.

If the dividend amount of preferred stock, $50 par value, is quoted as 8%, then the dividends per share would be $4.

Indicate whether the following actions would (+) increase, (-) decrease, or (0) not affect a company's total assets, liabilities, and stockholders' equity.

The reduction in the par or stated value of common stock, accompanied by the issuance of a proportionate number of additional shares, is called a stock split.

Significant changes in stockholders' equity are reported in

The two main sources of stockholders' equity are investments contributed by stockholders and net income retained in the business.

Which of the following would appear as a prior-period adjustment?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

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