Question 1

If a corporation receives assets other than cash in exchange for stock, it records the assets received at their market value as of the date of the transaction.

Accepted Answer

A) True 
 B)False

Question 2

For each of the following independent transactions a through d, prepare the necessary journal entry:
(a) Declared a $0.40 per share cash dividend on 300,000 shares of preferred stock outstanding.
(b) Declared and distributed an 8% stock dividend on 800,000 shares of $5 par value common stock outstanding. Market price per common share on this date was $25.
(c) Declared and distributed a 2-for-1 stock split on 400,000 shares of $10 par value common stock outstanding.
(d) Declared and distributed a 35% stock dividend on 700,000 common shares of $1 par value common stock outstanding. Market price per common share on this date was $20.

Accepted Answer

The answer of For each of the following independent transactions...

Question 3

The declaration of cash dividends increases retained earnings.

Accepted Answer

A) True 
 B)False

Question 4

Explain where each of the following items should appear in the financial statements of a corporation:
(1) The accounting department discovered that an entry was made last year to Insurance Expense instead of to Prepaid Insurance. The after-tax effect of the charge to Insurance Expense was $5,000.
(2) The company grants five of its employees the option to purchase 100 shares of its $5 par value common stock at its current market price of $20 per share anytime with the next five years. None of the employees exercised the options in the current year.

Accepted Answer

(1) This is an error that should be repo

Question 5

Retained earnings are part of the stockholders' claims on the company's net assets.

Accepted Answer

A) True 
 B)False

Question 6

What is treasury stock? What reasons might a company hold treasury stock?

Accepted Answer

Treasury stock is the company's own issu

Question 7

Preferred stock that the issuing corporation has the option to retire by paying a specified amount to the preferred stockholders is called:

Accepted Answer

A) Convertible preferred stock. 
B) Callable preferred stock. 
C) Premium stock. 
D) Cumulative preferred stock. 
E) Participating preferred stock. 
A) Convertible preferred stock. 
B) Callable preferred stock. 
C) Premium stock. 
D) Cumulative preferred stock. 
E) Participating preferred stock.

Question 8

The following data were reported by a corporation:   The number of outstanding shares is:

Accepted Answer

A) 12,000. 
B) 15,000. 
C) 17,000. 
D) 20,000. 
E) 23,000. 
A) 12,000. 
B) 15,000. 
C) 17,000. 
D) 20,000. 
E) 23,000.

Question 9

Paid-in capital is the total amount of cash and other assets the corporation receives from its stockholders in exchange for its stock.

Accepted Answer

A) True 
 B)False

Question 10

A corporation paid a cash dividend of $0.85 per share during the current year. It had 1,550,000 common shares outstanding at year-end, its current year earnings per share was $3.45, and the stock's year-end market price was $10.63 per share. Calculate the company's dividend yield.

Accepted Answer

Dividend Yield = Cas

Question 11

Mayan Company had net income of $132,000. The weighted-average common shares outstanding were 80,000. The company sold 3,000 shares before the end of the year. There were no other stock transactions. The company's earnings per share is:

Accepted Answer

A) $1.65. 
B) $1.59. 
C) $44.00. 
D) $26.67. 
E) $1.71. 
A) $1.65. 
B) $1.59. 
C) $44.00. 
D) $26.67. 
E) $1.71.

Question 12

Fargo Company's outstanding stock consists of 400 shares of noncumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.   The amount of dividends paid to preferred and common shareholders in 2016 is:

Accepted Answer

A) $200 preferred; $19,800 common. 
B) $4,000 preferred; $16,000 common. 
C) $17,000 preferred; $3,000 common. 
D) $10,000 preferred; $10,000 common. 
E) $20,000 preferred; $0 common. 
A) $200 preferred; $19,800 common. 
B) $4,000 preferred; $16,000 common. 
C) $17,000 preferred; $3,000 common. 
D) $10,000 preferred; $10,000 common. 
E) $20,000 preferred; $0 common.

Question 13

Gershwin Company reported net income of $428,000 and paid $8,500 in preferred cash dividends during the current year. The company had 110,000 common shares issued, and 10,000 common shares in treasury during the year. The year-end market price per common share was $41.05. Calculate the company's price-earnings ratio.

Accepted Answer

Price-Earnings Ratio = Market

Question 14

A proxy is a document that gives a designated agent the right to vote a shareholder's stock.

Accepted Answer

A) True 
 B)False

Question 15

Prior to June 30, a company has never had any treasury stock transactions. A company repurchased 100 shares of its common stock on June 30 for $40 per share. On July 20, it reissued 50 of these shares at $46 per share. On August 1, it reissued 20 of the shares at $38 per share. What is the balance in the Treasury Stock account on August 2?

Accepted Answer

A) $5,050. 
B) $2,600. 
C) $100. 
D) $1,200. 
E) $0. 
A) $5,050. 
B) $2,600. 
C) $100. 
D) $1,200. 
E) $0.

Question 16

A company has earnings per share net income of $90,000; its weighted-average common shares outstanding are 18,000. Its dividend per share is $0.45, its market price per share is $88, and its book value per share is $76. Its price-earnings ratio equals:

Accepted Answer

A) 9.0. 
B) 17.6. 
C) 12.5. 
D) 15.2. 
E) 16.9. 
A) 9.0. 
B) 17.6. 
C) 12.5. 
D) 15.2. 
E) 16.9.

Question 17

Preferred stock that confers rights to prior periods' unpaid dividends even if they were not declared is called:

Accepted Answer

A) Noncumulative preferred stock. 
B) Participating preferred stock. 
C) Callable preferred stock. 
D) Cumulative preferred stock. 
E) Convertible preferred stock. 
A) Noncumulative preferred stock. 
B) Participating preferred stock. 
C) Callable preferred stock. 
D) Cumulative preferred stock. 
E) Convertible preferred stock.

Question 18

A preemptive right means shareholders can purchase their proportional share of common stock issued later by the corporation.

Accepted Answer

A) True 
 B)False

Question 19

Purchasing treasury stock reduces the corporation's assets and stockholders' equity by unequal amounts.

Accepted Answer

A) True 
 B)False

Question 20

The number of shares that a corporation's charter allows it to sell is the ____________________ stock.

Accepted Answer

The answer of The number of shares that a corporation's...

If a corporation receives assets other than cash in exchange for stock, it records the assets received at their market value as of the date of the transaction.

The declaration of cash dividends increases retained earnings.

Retained earnings are part of the stockholders' claims on the company's net assets.

What is treasury stock? What reasons might a company hold treasury stock?

Preferred stock that the issuing corporation has the option to retire by paying a specified amount to the preferred stockholders is called:

The following data were reported by a corporation: The number of outstanding shares is:

Paid-in capital is the total amount of cash and other assets the corporation receives from its stockholders in exchange for its stock.

A corporation paid a cash dividend of $0.85 per share during the current year. It had 1,550,000 common shares outstanding at year-end, its current year earnings per share was $3.45, and the stock's year-end market price was $10.63 per share. Calculate the company's dividend yield.

Mayan Company had net income of $132,000. The weighted-average common shares outstanding were 80,000. The company sold 3,000 shares before the end of the year. There were no other stock transactions. The company's earnings per share is:

A proxy is a document that gives a designated agent the right to vote a shareholder's stock.

A company has earnings per share net income of $90,000; its weighted-average common shares outstanding are 18,000. Its dividend per share is $0.45, its market price per share is $88, and its book value per share is $76. Its price-earnings ratio equals:

Preferred stock that confers rights to prior periods' unpaid dividends even if they were not declared is called:

A preemptive right means shareholders can purchase their proportional share of common stock issued later by the corporation.

Purchasing treasury stock reduces the corporation's assets and stockholders' equity by unequal amounts.

The number of shares that a corporation's charter allows it to sell is the ____________________ stock.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Reporting and Analyzing Partnerships

Filters

Exam 11: Reporting and Analyzing Equity

If a corporation receives assets other than cash in exchange for stock, it records the assets received at their market value as of the date of the transaction.

The declaration of cash dividends increases retained earnings.

Retained earnings are part of the stockholders' claims on the company's net assets.

What is treasury stock? What reasons might a company hold treasury stock?

Preferred stock that the issuing corporation has the option to retire by paying a specified amount to the preferred stockholders is called:

The following data were reported by a corporation: The number of outstanding shares is:

Paid-in capital is the total amount of cash and other assets the corporation receives from its stockholders in exchange for its stock.

A corporation paid a cash dividend of $0.85 per share during the current year. It had 1,550,000 common shares outstanding at year-end, its current year earnings per share was $3.45, and the stock's year-end market price was $10.63 per share. Calculate the company's dividend yield.

Mayan Company had net income of $132,000. The weighted-average common shares outstanding were 80,000. The company sold 3,000 shares before the end of the year. There were no other stock transactions. The company's earnings per share is:

A proxy is a document that gives a designated agent the right to vote a shareholder's stock.

A company has earnings per share net income of $90,000; its weighted-average common shares outstanding are 18,000. Its dividend per share is $0.45, its market price per share is $88, and its book value per share is $76. Its price-earnings ratio equals:

Preferred stock that confers rights to prior periods' unpaid dividends even if they were not declared is called:

A preemptive right means shareholders can purchase their proportional share of common stock issued later by the corporation.

Purchasing treasury stock reduces the corporation's assets and stockholders' equity by unequal amounts.

The number of shares that a corporation's charter allows it to sell is the ____________________ stock.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Reporting and Analyzing Partnerships

Filters