Question 1

How many shares of common stock are outstanding?

Accepted Answer

A) 600,000 shares 
B) 606,000 shares 
C) 594,000 shares 
D) 1,000,000 shares 
A) 600,000 shares 
B) 606,000 shares 
C) 594,000 shares 
D) 1,000,000 shares

Question 2

[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.
-The total amount of Grant's paid-in capital at December 31,2018,is:

Accepted Answer

A) $1,960,000. 
B) $1,090,000. 
C) $3,460,000. 
D) $3,050,000. 
A) $1,960,000. 
B) $1,090,000. 
C) $3,460,000. 
D) $3,050,000.

Question 3

When no-par stock is issued,the entire proceeds are credited to Capital Stock and this amount is viewed as legal capital not subject to withdrawal.

Accepted Answer

A) True 
 B)False

Question 4

How many shares of preferred stock are outstanding?

Accepted Answer

A) 32,400 shares 
B) 5,400 shares 
C) 10,000 shares 
D) The number of shares cannot be determined without more information. 
A) 32,400 shares 
B) 5,400 shares 
C) 10,000 shares 
D) The number of shares cannot be determined without more information.

Question 5

If the preferred stock of a corporation is cumulative:

Accepted Answer

A) Dividends on preferred stock are guaranteed. 
B) Dividends cannot be declared in an amount less than that stated on the stock certificate. 
C) Preferred stockholders participate in dividends paid in excess of a stated amount on the common shares. 
D) Dividends in arrears must be paid on preferred stock before any dividend can be paid on common stock. 
A) Dividends on preferred stock are guaranteed. 
B) Dividends cannot be declared in an amount less than that stated on the stock certificate. 
C) Preferred stockholders participate in dividends paid in excess of a stated amount on the common shares. 
D) Dividends in arrears must be paid on preferred stock before any dividend can be paid on common stock.

Question 6

Book value per share and other computations
Shown below is information relating to the stockholders' equity of Silver Waste Management at December 31,2018:
   (a)Silver's total legal capital at December 31,2018 is $________.
(b)The total amount of Silver's paid-in capital at December 31,2018 is $________.
(c)The average issue price per share of Silver's preferred stock was $________.
(d)The book value per share of common stock is $________ per share.
(e)The balance in Retained Earnings at the beginning of the year was $1,237,500,and net income for 2018 was $1,600,500.What was the amount of dividend declared on each share of common stock during 2018? $________ per share.

Accepted Answer

(a)$900,000 + $2,600,000 = $3,500,000 to

Question 7

When a corporation issues capital stock at a price higher than the par value:

Accepted Answer

A) The amount received over par value increases retained earnings. 
B) The entire issue price is credited to the Capital Stock account. 
C) The amount received in excess of par value constitutes profit to the issuing corporation. 
D) The amount received in excess of par value becomes part of paid-in capital. 
A) The amount received over par value increases retained earnings. 
B) The entire issue price is credited to the Capital Stock account. 
C) The amount received in excess of par value constitutes profit to the issuing corporation. 
D) The amount received in excess of par value becomes part of paid-in capital.

Question 8

A stockholders' subsidiary ledger will have entries made for each stockholder showing the number of shares held.

Accepted Answer

A) True 
 B)False

Question 9

Assuming there is no preferred stock,book value per share of common stock is derived by which of the following?

Accepted Answer

A) Stockholders' equity divided by the number of shares authorized. 
B) Stockholders' equity divided by the number of shares outstanding. 
C) Net income divided by the number of shares outstanding. 
D) Net income divided by the number of shares authorized. 
A) Stockholders' equity divided by the number of shares authorized. 
B) Stockholders' equity divided by the number of shares outstanding. 
C) Net income divided by the number of shares outstanding. 
D) Net income divided by the number of shares authorized.

Question 10

[The following information applies to the questions displayed below.]
Shown below is information relating to the stockholders' equity of Reeve Corporation as of December 31,2018:
  
-How many shares of preferred stock are issued and outstanding?

Accepted Answer

A) 75,000 shares 
B) 6,000 shares 
C) 60,000 shares 
D) 120,000 shares 
A) 75,000 shares 
B) 6,000 shares 
C) 60,000 shares 
D) 120,000 shares

Question 11

The advantages of corporations going public include all of the following except:

Accepted Answer

A) Professional management. 
B) Transferability of ownership. 
C) Limited shareholder liability. 
D) Ability to remove assets. 
A) Professional management. 
B) Transferability of ownership. 
C) Limited shareholder liability. 
D) Ability to remove assets.

Question 12

[The following information applies to the questions displayed below.]
Vision Corporation has the following information on its financial statement:
  
-If Vision paid a total of $55,800 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) $0.12 per share 
B) $0.24 per share 
C) $0.06 per share 
D) $0.18 per share 
A) $0.12 per share 
B) $0.24 per share 
C) $0.06 per share 
D) $0.18 per share

Question 13

A stock split will normally increase the market price of the stock and decrease the number of shares on the market.

Accepted Answer

A) True 
 B)False

Question 14

Shares that have been sold and are in the hands of stockholders are called:

Accepted Answer

A) Outstanding. 
B) Issued. 
C) Treasury. 
D) Underwritten. 
A) Outstanding. 
B) Issued. 
C) Treasury. 
D) Underwritten.

Question 15

Stockholders of a corporation are personally liable for the debts of the corporation if all shares of stock are owned by the officers of the corporation.

Accepted Answer

A) True 
 B)False

Question 16

Book value per share of common stock is: (Round to 2 decimal places. )

Accepted Answer

A) $15.10. 
B) $14.10. 
C) $15.90. 
D) $19.10. 
A) $15.10. 
B) $14.10. 
C) $15.90. 
D) $19.10.

Question 17

Which of the following is not a right of stockholders?

Accepted Answer

A) To vote for directors and on key issues. 
B) To participate in dividends declared. 
C) To share in the distribution of assets if the corporation is liquidated. 
D) To select the Chief Executive Officer. 
A) To vote for directors and on key issues. 
B) To participate in dividends declared. 
C) To share in the distribution of assets if the corporation is liquidated. 
D) To select the Chief Executive Officer.

Question 18

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)The type of stock whose owners have little say in management of the corporation and whose annual dividend is limited to a preset amount.
________ (b)Distribution of cash or other company assets to the owners of a corporation.
________ (c)An investment banking firm that guarantees an issuing corporation a specific price for a stock issue and then makes a profit by selling the shares to the investing public at a higher price.
________ (d)Shares of a corporation's stock that have been issued and then reacquired,but not cancelled.
________ (e)An element of stockholders' equity arising from the profitable operations of a business.
________ (f)The type of stock most likely to increase dramatically in value if the issuing corporation is extremely successful.
________ (g)Amounts invested in a corporation by its stockholders.

Accepted Answer

(a)Preferred stock, (b)Dividen

Question 19

Which of the following best describes the book value of a share of stock?

Accepted Answer

A) Net assets divided by the number of shares outstanding. 
B) The amount at which the stock would sell on the market if sold by a willing and informed seller to a willing and informed buyer. 
C) Total assets of the company,as reported in the accounting records,divided by the number of shares of stock outstanding. 
D) Total stockholders' equity divided by the number of shares authorized. 
A) Net assets divided by the number of shares outstanding. 
B) The amount at which the stock would sell on the market if sold by a willing and informed seller to a willing and informed buyer. 
C) Total assets of the company,as reported in the accounting records,divided by the number of shares of stock outstanding. 
D) Total stockholders' equity divided by the number of shares authorized.

Question 20

Shore and Gardiner each own 10,000 shares of S&G Corporation $12 par value stock,which they purchased for $38 per share directly from the corporation.If Shore sells his stock to Gardiner for $475,000:

Accepted Answer

A) Stockholders' equity of S&G Corporation increases. 
B) Assets of S&G Corporation increase. 
C) Stockholders' equity of S&G Corporation decreases. 
D) No account of S&G Corporation is affected. 
A) Stockholders' equity of S&G Corporation increases. 
B) Assets of S&G Corporation increase. 
C) Stockholders' equity of S&G Corporation decreases. 
D) No account of S&G Corporation is affected.

Exam 11: Stockholders Equity: Paid-In Capital

How many shares of common stock are outstanding?

[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. -The total amount of Grant's paid-in capital at December 31,2018,is:

When no-par stock is issued,the entire proceeds are credited to Capital Stock and this amount is viewed as legal capital not subject to withdrawal.

How many shares of preferred stock are outstanding?

If the preferred stock of a corporation is cumulative:

When a corporation issues capital stock at a price higher than the par value:

A stockholders' subsidiary ledger will have entries made for each stockholder showing the number of shares held.

Assuming there is no preferred stock,book value per share of common stock is derived by which of the following?

[The following information applies to the questions displayed below.] Shown below is information relating to the stockholders' equity of Reeve Corporation as of December 31,2018: -How many shares of preferred stock are issued and outstanding?

The advantages of corporations going public include all of the following except:

A stock split will normally increase the market price of the stock and decrease the number of shares on the market.

Shares that have been sold and are in the hands of stockholders are called:

Stockholders of a corporation are personally liable for the debts of the corporation if all shares of stock are owned by the officers of the corporation.

Book value per share of common stock is: (Round to 2 decimal places. )

Which of the following is not a right of stockholders?

Which of the following best describes the book value of a share of stock?

Shore and Gardiner each own 10,000 shares of S&G Corporation $12 par value stock,which they purchased for $38 per share directly from the corporation.If Shore sells his stock to Gardiner for $475,000:

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

Filters