Question 1

Most preferred stocks have one or more of the following characteristics,except:

Accepted Answer

A) To receive dividends on a preferred basis. 
B) Cumulative dividends. 
C) Voting rights. 
D) Callable at the option of the corporation. 
A) To receive dividends on a preferred basis. 
B) Cumulative dividends. 
C) Voting rights. 
D) Callable at the option of the corporation. C

Question 2

It is illegal for the government to tax corporate earnings twice.

Accepted Answer

A) True 
 B)False  False

Question 3

If capital stock is issued by a corporation at a price lower than par value,the difference represents a loss in the period in which the shares of stock are issued.

Accepted Answer

A) True 
 B)False  False

Question 4

Topper Corporation has 60,000 shares of $1 par value common stock and 16,000 shares of cumulative 7%,$100 par preferred stock outstanding.Topper has not paid a dividend for the prior year.If Topper declares a $1.95 per common share dividend this year,what will be the total amount they must pay their shareholders?

Accepted Answer

A) $117,000 
B) $341,000 
C) $327,000 
D) $177,000 
A) $117,000 
B) $341,000 
C) $327,000 
D) $177,000

Question 5

Stockholders' Equity
Blake Corporation has the following accounts on December 31,2018
Common Stock $.25 par,1,000,000 authorized,400,000 issued.
Preferred stock 6%,$100 par,cumulative,5,000 shares authorized,3,000 issued.
Treasury stock,1,500 shares purchased at market value of $6 per share
   Required:
(1)Prepare the stockholders' equity section of the balance sheet.
(2)Prepare the journal entry for the purchase of the treasury stock.
(3)Blake paid the liability for dividends on March 1.Prepare the journal entry for the payment.

Accepted Answer

The answer of Stockholders' Equity
Blake Corporation has the following accounts...

Question 6

On April 16,2018,Rodriguez Corporation reacquired 12,000 shares of its own $10 par stock for $660,000 cash.On November 4,2019,1,000 of the treasury shares were reissued at a price of $65 per share.The journal entry to record the reissuance of the 1,000 shares of stock on November 4 includes a:

Accepted Answer

A) Credit to Common Stock of $10,000. 
B) Credit to Additional Paid-In Capital: Treasury Stock Transactions of $10,000. 
C) Credit to Gain on Treasury Stock Transactions of $10,000. 
D) Credit to Treasury Stock Reissued of $65,000. 
A) Credit to Common Stock of $10,000. 
B) Credit to Additional Paid-In Capital: Treasury Stock Transactions of $10,000. 
C) Credit to Gain on Treasury Stock Transactions of $10,000. 
D) Credit to Treasury Stock Reissued of $65,000.

Question 7

If preferred stock is convertible,it is so at the option of the:

Accepted Answer

A) Board of directors. 
B) CEO. 
C) CFO. 
D) Stockholders. 
A) Board of directors. 
B) CEO. 
C) CFO. 
D) Stockholders.

Question 8

Stock values
Presented below is an excerpt from the stock listings of a recent issue of the Wall Street Journal.   Answer the following questions based on the information about the Russell Corporation given above:
(a)How many shares of Russell Corporation stock were sold on this day?
(b)If you had purchased 10 shares of Russell Corporation stock at the lowest price of the day,what would be the total price that you would have paid for the stock?
(c)What was the closing price of Russell Corporation Stock on the previous day?
(d)If the board of directors of Russell Corporation increased the amount of the annual dividends to $1.00 per share,what would be the amount of the yield percentage on the stock?

Accepted Answer

(a)1,640 × 100 = 164,000
(b)10

Question 9

Prepare journal entries for stockholders' equity transactions
A partial list of the ledger accounts of Hellman Company is shown below,followed by a list of transactions.Indicate the accounts that would be debited and credited in recording each transaction.

Accepted Answer

The answer of Prepare journal entries for stockholders' equity transactions
A...

Question 10

Which of the following individuals has the most power to influence corporate policy on a long-term basis?

Accepted Answer

A) A shareholder owning 60% of the outstanding common stock. 
B) A shareholder owning 80% of the outstanding preferred stock. 
C) The treasurer of the corporation. 
D) The controller of the corporation. 
A) A shareholder owning 60% of the outstanding common stock. 
B) A shareholder owning 80% of the outstanding preferred stock. 
C) The treasurer of the corporation. 
D) The controller of the corporation.

Question 11

Determining book value per share
Shown below is information relating to the stockholders' equity of Churchill,Inc.:
   From the above information,compute the following:
(a)Number of shares of preferred stock issued and outstanding
(b)Average issue price per share of common stock
(c)Total paid-in capital
(d)Total stockholders' equity
(e)Book value per share of common stock

Accepted Answer

(a)12,000 shares
(b)

Question 12

[The following information applies to the questions displayed below.]
Amelia Corporation has the following information in its financial statement:
  
-If Amelia paid a total of $75,000 in dividends,how much would each common stockholder receive for each share of stock owned? (Assume there are no dividends in arrears. )

Accepted Answer

A) $0.23 per share 
B) $0.13 per share 
C) $0.18 per share 
D) $0.08 per share 
A) $0.23 per share 
B) $0.13 per share 
C) $0.18 per share 
D) $0.08 per share

Question 13

[The following information applies to the questions displayed below.]
Shown below is information relating to the stockholders' equity of Grant Corporation at December 31,2018:
   Dividends have been declared and paid for 2018.
-Grant's total legal capital at December 31,2018,is:

Accepted Answer

A) $3,160,000. 
B) $3,000,000. 
C) $2,590,000. 
D) $1,500,000. 
A) $3,160,000. 
B) $3,000,000. 
C) $2,590,000. 
D) $1,500,000.

Question 14

Which of the following does not appear in a corporate income statement?

Accepted Answer

A) Gains and losses from treasury stock transactions. 
B) Income tax expense. 
C) The income or loss from a segment of the business that has been discontinued during the current year. 
D) Gains and losses not expected to recur in the foreseeable future. 
A) Gains and losses from treasury stock transactions. 
B) Income tax expense. 
C) The income or loss from a segment of the business that has been discontinued during the current year. 
D) Gains and losses not expected to recur in the foreseeable future.

Question 15

The term paid-in capital means:

Accepted Answer

A) All assets other than retained earnings. 
B) Legal capital plus retained earnings. 
C) Total stockholders' equity minus retained earnings. 
D) Legal capital minus retained earnings. 
A) All assets other than retained earnings. 
B) Legal capital plus retained earnings. 
C) Total stockholders' equity minus retained earnings. 
D) Legal capital minus retained earnings.

Question 16

A stock split will decrease the par value per share of the stock.

Accepted Answer

A) True 
 B)False

Question 17

When shares of stock are sold from one investor to another,they will trade at:

Accepted Answer

A) Par value. 
B) Book value. 
C) Market value. 
D) Stated Value. 
A) Par value. 
B) Book value. 
C) Market value. 
D) Stated Value.

Question 18

In a "pump-and-dump" scheme,the owners of the company:

Accepted Answer

A) Falsely claim the business has high growth potential. 
B) Artificially raise the price of the stock. 
C) Sell the stock at a high price. 
D) Falsely claim that the business has high growth potential,artificially raise the price of the stock,and sell the stock at a high price. 
A) Falsely claim the business has high growth potential. 
B) Artificially raise the price of the stock. 
C) Sell the stock at a high price. 
D) Falsely claim that the business has high growth potential,artificially raise the price of the stock,and sell the stock at a high price.

Question 19

Interpreting stockholders' equity section
The stockholders' equity section of the balance sheet of Powell Corporation (with certain details omitted)appears below:   Answer the following questions based on the stockholders' equity section given above:
(a)What is the total amount of legal capital?
(b)What is the total amount of dividends paid annually to the preferred stockholders?
(c)What is the average issue price of a share of common stock?
(d)The balance in retained earnings at the beginning of the current year was $1,351,500,and there were no dividends in arrears.Net income for the current year was $700,000.What is the amount of the dividends declared on each share of common stock during the current year?

Accepted Answer

(a)$2,850,000
(b)$15

Question 20

A 2-for-1 stock split will:

Accepted Answer

A) Increase the total par value of the stock and increase the number of shares outstanding. 
B) Decrease the total par value of the stock and increase the number of shares outstanding. 
C) Not change the total par value of the stock and increase the number of shares outstanding. 
D) Increase total stockholders' equity. 
A) Increase the total par value of the stock and increase the number of shares outstanding. 
B) Decrease the total par value of the stock and increase the number of shares outstanding. 
C) Not change the total par value of the stock and increase the number of shares outstanding. 
D) Increase total stockholders' equity.

Exam 11: Stockholders Equity: Paid-In Capital

Most preferred stocks have one or more of the following characteristics,except:

It is illegal for the government to tax corporate earnings twice.

If capital stock is issued by a corporation at a price lower than par value,the difference represents a loss in the period in which the shares of stock are issued.

On April 16,2018,Rodriguez Corporation reacquired 12,000 shares of its own $10 par stock for $660,000 cash.On November 4,2019,1,000 of the treasury shares were reissued at a price of $65 per share.The journal entry to record the reissuance of the 1,000 shares of stock on November 4 includes a:

If preferred stock is convertible,it is so at the option of the:

Prepare journal entries for stockholders' equity transactions A partial list of the ledger accounts of Hellman Company is shown below,followed by a list of transactions.Indicate the accounts that would be debited and credited in recording each transaction.

Which of the following individuals has the most power to influence corporate policy on a long-term basis?

[The following information applies to the questions displayed below.] Shown below is information relating to the stockholders' equity of Grant Corporation at December 31,2018: Dividends have been declared and paid for 2018. -Grant's total legal capital at December 31,2018,is:

Which of the following does not appear in a corporate income statement?

The term paid-in capital means:

A stock split will decrease the par value per share of the stock.

When shares of stock are sold from one investor to another,they will trade at:

In a "pump-and-dump" scheme,the owners of the company:

A 2-for-1 stock split will:

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

Income and Changes in Retained Earnings

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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