Question 1

Large stock dividends tend to keep stock prices down.

Accepted Answer

A) True 
 B)False  True

Question 2

Platinum Company reports net income of $520,000 for 2018 and declared a cash dividend of $1 per share on each of its 100,000 shares of common stock outstanding.What are earnings per share for 2018?

Accepted Answer

A) $5.20 per share 
B) $1.00 per share 
C) $1.20 per share 
D) $4.80 per share 
A) $5.20 per share 
B) $1.00 per share 
C) $1.20 per share 
D) $4.80 per share A

Question 3

Unique Corp.had 50,000 shares of $5 preferred stock,$100 par,and 100,000 shares of $1 par common stock outstanding throughout the year.Net income for the year was $780,000,and Unique declared and distributed a cash dividend of $1 per share on its common stock.Earnings per share amounted to:

Accepted Answer

A) $7.80. 
B) $1.00. 
C) $5.30. 
D) $2.30. 
A) $7.80. 
B) $1.00. 
C) $5.30. 
D) $2.30. C

Question 4

Prior period adjustments are shown in the financial statements by adjusting the beginning balance of retained earnings in the statement of retained earnings.

Accepted Answer

A) True 
 B)False

Question 5

A company had 240,000 shares of common stock outstanding on January 1 and then sold 60,000 additional shares on April 30.Net income for the year was $426,750.What are earnings per share?

Accepted Answer

A) $1.42 
B) $1.52 
C) $1.78 
D) $7.11 
A) $1.42 
B) $1.52 
C) $1.78 
D) $7.11

Question 6

On January 1,2018,Ole Corporation had 75,000 shares of $8 par value common stock outstanding.On July 31,2018,Ole issued an additional 10,000 shares in exchange for a building.What number of shares will be used in the computation of earnings per share for the year 2018?

Accepted Answer

A) 75,000 
B) 80,000 
C) 79,167 
D) 85,000 
A) 75,000 
B) 80,000 
C) 79,167 
D) 85,000

Question 7

Corona Corporation's financial statements for the current year include the following:   On the basis of this information,net income for the current year is:

Accepted Answer

A) $1,359,600. 
B) $ 818,400. 
C) $1,485,000. 
D) $1,234,200. 
A) $1,359,600. 
B) $ 818,400. 
C) $1,485,000. 
D) $1,234,200.

Question 8

Recent rulings by the SEC now require all corporations to prepare an expanded version of the Statement of Retained Earnings showing all equity accounts and their changes for the last three years.

Accepted Answer

A) True 
 B)False

Question 9

In order for a loss on the disposal of a discontinued operation to be classified on the income statement as a discontinued operation,it must be unusual in nature.

Accepted Answer

A) True 
 B)False

Question 10

In order to receive a dividend,a stockholder must have owned the stock as of the declaration date.

Accepted Answer

A) True 
 B)False

Question 11

Discontinued operations should be shown on the statement of retained earnings net of taxes.

Accepted Answer

A) True 
 B)False

Question 12

MRB Company purchased 1,000 shares of its own outstanding $12 par value common stock for $16 per share and then sold 400 shares six months later for $19 a share.Prepare the journal entries for the purchase of the stock and for the sale.

Accepted Answer

The answer of MRB Company purchased 1,000 shares of its...

Question 13

The date on a statement of retained earnings is at a point in time,such as,at December 31,2018.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) Should be reflected on the current year's income statement. 
B) Should be reflected,net of taxes,on the retained earnings statement. 
C) Should be reflected as a change in accounting principle. 
D) Should be considered as a non-recurring item,and shown,net of taxes,on the income statement. 
A) Should be reflected on the current year's income statement. 
B) Should be reflected,net of taxes,on the retained earnings statement. 
C) Should be reflected as a change in accounting principle. 
D) Should be considered as a non-recurring item,and shown,net of taxes,on the income statement.

Question 15

Income statement and earnings per share
Shown below is information relating to operations of Broadway Industries for 2018:
   In the space provided,complete the income statement for Broadway Industries,including earnings per share figures.Broadway Industries has 100,000 shares of a single class of common stock outstanding throughout the year.

Accepted Answer

The answer of Income statement and earnings per share
Shown below...

Question 16

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:

Accepted Answer

The answer of Stock dividends and stock split-journal entries
Eagle Corporation...

Question 17

The price-earnings ratio is the:

Accepted Answer

A) Book value of a share of common stock divided by EPS. 
B) Market price of a share of common stock divided by EPS. 
C) Par value of a share of common stock divided by EPS. 
D) Market price divided by book value of a share of stock. 
A) Book value of a share of common stock divided by EPS. 
B) Market price of a share of common stock divided by EPS. 
C) Par value of a share of common stock divided by EPS. 
D) Market price divided by book value of a share of stock.

Question 18

Which of the following items would not reduce retained earnings?

Accepted Answer

A) A common stock dividend 
B) A preferred stock dividend 
C) A cash dividend 
D) A cash payment of a previously declared dividend 
A) A common stock dividend 
B) A preferred stock dividend 
C) A cash dividend 
D) A cash payment of a previously declared dividend

Question 19

When a company reports both diluted earnings per share and basic earnings per share:

Accepted Answer

A) Basic EPS would be greater than fully diluted EPS. 
B) Basic EPS would be less than fully diluted EPS. 
C) Basic EPS may be either greater or less than fully diluted EPS. 
D) Both should never be shown;only one or the other would be reported. 
A) Basic EPS would be greater than fully diluted EPS. 
B) Basic EPS would be less than fully diluted EPS. 
C) Basic EPS may be either greater or less than fully diluted EPS. 
D) Both should never be shown;only one or the other would be reported.

Question 20

When a corporation presents both "basic" and "diluted" earnings per share,basic earnings per share will be the smaller of the two figures.

Accepted Answer

A) True 
 B)False

Exam 12: Income and Changes in Retained Earnings

Large stock dividends tend to keep stock prices down.

Platinum Company reports net income of $520,000 for 2018 and declared a cash dividend of $1 per share on each of its 100,000 shares of common stock outstanding.What are earnings per share for 2018?

Unique Corp.had 50,000 shares of $5 preferred stock,$100 par,and 100,000 shares of $1 par common stock outstanding throughout the year.Net income for the year was $780,000,and Unique declared and distributed a cash dividend of $1 per share on its common stock.Earnings per share amounted to:

Prior period adjustments are shown in the financial statements by adjusting the beginning balance of retained earnings in the statement of retained earnings.

A company had 240,000 shares of common stock outstanding on January 1 and then sold 60,000 additional shares on April 30.Net income for the year was $426,750.What are earnings per share?

On January 1,2018,Ole Corporation had 75,000 shares of $8 par value common stock outstanding.On July 31,2018,Ole issued an additional 10,000 shares in exchange for a building.What number of shares will be used in the computation of earnings per share for the year 2018?

Corona Corporation's financial statements for the current year include the following: On the basis of this information,net income for the current year is:

Recent rulings by the SEC now require all corporations to prepare an expanded version of the Statement of Retained Earnings showing all equity accounts and their changes for the last three years.

In order for a loss on the disposal of a discontinued operation to be classified on the income statement as a discontinued operation,it must be unusual in nature.

In order to receive a dividend,a stockholder must have owned the stock as of the declaration date.

Discontinued operations should be shown on the statement of retained earnings net of taxes.

MRB Company purchased 1,000 shares of its own outstanding $12 par value common stock for $16 per share and then sold 400 shares six months later for $19 a share.Prepare the journal entries for the purchase of the stock and for the sale.

The date on a statement of retained earnings is at a point in time,such as,at December 31,2018.

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

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:

The price-earnings ratio is the:

Which of the following items would not reduce retained earnings?

When a company reports both diluted earnings per share and basic earnings per share:

When a corporation presents both "basic" and "diluted" earnings per share,basic earnings per share will be the smaller of the two figures.

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

the Time Value of Money: Future Amounts and Present Values

Forms of Business Organization

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