Exam 12: Income and Changes in Retained Earnings

Which of the following situations would not be presented in a separate section of the current year's income statement of Hamilton Corporation? (More than one answer may be correct.) During the current year:

Refer to the information above. Assume that all remaining treasury stock is reissued at a price of $14 per share in January of 2010. What amount should be credited to the account Additional Paid-In Capital: Treasury Stock Transactions in the journal entry to record this transaction?

All things being equal, if investors expect earnings to increase substantially from current levels, the price/earnings ratio will:

Which of the following has no effect on the computation of earnings per share for the current period?

Donnell Corp. had 100,000 shares of 8% preferred stock, $100 par, and 500,000 shares of $1 par common stock outstanding throughout the year. Net income for the year was $4,800,000, and Donnell declared and distributed a cash dividend of $4 per share on its common stock. Earnings per share amounted to:

A prior period adjustment appears in:

Which of the following items would be included in comprehensive income but not reported as a component of net income?

Stock dividends and stock split-journal entries Eagle Corporation has 250,000 shares of $6 par value capital stock outstanding. Prepare journal entries in the space provided to record the following transactions during the current year:

Beck Corporation declared a 2-for-1 common stock split, but this transaction was erroneously recorded as a 100% common stock dividend. As a result:

A stock dividend provides a stockholder with more shares of stock, but his or her percentage of ownership in the company is no larger than before.

Accounting terminology Listed below are nine technical accounting terms introduced in this chapter: Each of the following statements may (or may not) describe one of these technical terms. In the space provided beside each statement, indicate the accounting term described, or answer "None" if the statement does not correctly describe any of the terms. ____ (a) A financial statement showing the revenue, expenses, and net earnings of a corporation during the current accounting period. ____ (b) A distribution of cash to stockholders. ____ (c) A distribution to stockholders of additional shares of stock, accompanied by a proportionate reduction in the par value per share. ____ (d) The market price of a share of preferred stock, divided by the net income of the corporation. ____ (e) A correction in the amount of net income reported in an earlier accounting period. ____ (f) An event that is material in dollar amount, unusual in nature, and not expected to recur in the foreseeable future. ____ (g) A subtotal sometimes included in an income statement to assist investors in forecasting the income of future accounting periods.

A small stock dividend of 5,000 shares was declared and distributed during 2009. What was the market price per share on the date of declaration?

If a material accounting error was made in a prior year, that error: