Question 1

The par value of treasury stock is deducted from total Contributed Capital and Retained Earnings in determining total stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 2

Stock options often are granted by a corporation to management personnel as a means of additional compensation and motivation of these employees.

Accepted Answer

A) True 
 B)False

Question 3

A corporation cannot declare a dividend that would cause stockholders' equity to fall below the legal capital.

Accepted Answer

A) True 
 B)False

Question 4

Holders of preferred stock normally do not have

Accepted Answer

A) preference as to dividends. 
B) preference as to assets in liquidations. 
C) full voting rights. 
D) ownership interests in the corporation. 
A) preference as to dividends. 
B) preference as to assets in liquidations. 
C) full voting rights. 
D) ownership interests in the corporation.

Question 5

At December 31,20x5,the book value per share of common stock of Camino Corporation amounted to $21 per share.Determine the effect of each of the following items on the book value per share of common stock computation assuming each item occurs after December 31,20x5.Consider each item independently of the other items listed.Indicate your answer for each (I = increase,D = decrease,or NE = no effect)in the appropriate blank.
_____ 1.Sale of newly issued shares of common stock at $23 per share
_____ 2.Purchase of treasury stock for $16 per share
_____ 3.Declaration of current cash dividends on preferred stock
_____ 4.Declaration and distribution of stock dividends on common stock
_____ 5.Sale of treasury stock (purchased at $16 per share)for $19 per share
_____ 6.Entry to close net income for the period to the Retained Earnings account
_____ 7.Dividends in arrears on preferred stock
_____ 8.Purchase of a truck with cash
_____ 9.Payment of a previously declared and recorded cash dividend on common stock

Accepted Answer

The answer of At December 31,20x5,the book value per share...

Question 6

The following facts pertain to the stockholders' equity section of the balance sheet of Avenida Corporation:
   During 20x5,Avenida declared and distributed a stock dividend.Also during 20x5,Avenida declared and paid cash dividends of $17,000.There were no changes in the number of shares of stock issued and outstanding during the period except for the change caused by the stock dividend.Calculate the amount of net income reported by Avenida for 20x5.

Accepted Answer

$37,400 [178,500 - (

Question 7

Par value

Accepted Answer

A) is established for a share of stock after it is issued. 
B) is the legal capital established for a share of stock. 
C) represents what a share of stock is worth. 
D) represents the original selling price for a share of stock. 
A) is established for a share of stock after it is issued. 
B) is the legal capital established for a share of stock. 
C) represents what a share of stock is worth. 
D) represents the original selling price for a share of stock.

Question 8

A corporation's residual equity is its

Accepted Answer

A) preferred stock. 
B) retained earnings. 
C) common stock. 
D) cash. 
A) preferred stock. 
B) retained earnings. 
C) common stock. 
D) cash.

Question 9

Stockholders who own preferred stock usually do not have voting rights,whereas stockholders who own common stock usually have voting rights.

Accepted Answer

A) True 
 B)False

Question 10

Outstanding shares of stock are

Accepted Answer

A) authorized shares that have not yet been issued. 
B) also called treasury shares. 
C) issued shares that have not yet been authorized. 
D) issued shares that are still in circulation. 
A) authorized shares that have not yet been issued. 
B) also called treasury shares. 
C) issued shares that have not yet been authorized. 
D) issued shares that are still in circulation.

Question 11

Which of the following items will not be disclosed on a statement of stockholders' equity?

Accepted Answer

A) Conversion of preferred stock into common stock 
B) Results of discontinued operations 
C) Purchase of treasury stock 
D) Declaration of a stock dividend 
A) Conversion of preferred stock into common stock 
B) Results of discontinued operations 
C) Purchase of treasury stock 
D) Declaration of a stock dividend

Question 12

The following amounts were reported by Paloma Corporation on December 31,20x4 :
   On January 3,20x5 ,5,000 shares of treasury stock were sold.After the sale of the treasury shares,total stockholders' equity amounted to $277,500.No stockholders' equity transactions other than the sale of the treasury stock occurred between December 31,20x4 ,and January 3,20x5.From the information given,compute the selling price per share of the treasury stock.

Accepted Answer

$13.50 per share [27

Question 13

A corporation often uses an underwriter to guarantee the sale of stock in an initial public offering (IPO).

Accepted Answer

A) True 
 B)False

Question 14

Start-up and organization costs should be expensed as incurred.

Accepted Answer

A) True 
 B)False

Question 15

The information that follows pertains to stockholders' equity data of Frame Corporation on December 31,20x5.Compute the amount of each item indicated by a letter in the listing below.

Accepted Answer

a.30,000 shares ($300,000 F1F1

Question 16

Return on equity equals net income divided by average stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 17

The following facts pertain to Quail Corporation:
   On the basis of these facts,compute the amount of net income (loss)for Quail Corporation for 20x5.

Accepted Answer

$205,000 net income

Question 18

A 2-for-1 stock split will have the same effect on the number of shares outstanding as a 200 percent stock dividend.

Accepted Answer

A) True 
 B)False

Question 19

How should dividends in arrears be shown on a corporation's balance sheet?

Accepted Answer

A) As an increase in liabilities. 
B) In a note or in the body of the financial statements. 
C) As a decrease in assets. 
D) As an increase in stockholders' equity. 
A) As an increase in liabilities. 
B) In a note or in the body of the financial statements. 
C) As a decrease in assets. 
D) As an increase in stockholders' equity.

Question 20

Cash dividends become a liability of a corporation when the stock goes ex-dividend.

Accepted Answer

A) True 
 B)False

The par value of treasury stock is deducted from total Contributed Capital and Retained Earnings in determining total stockholders' equity.

Stock options often are granted by a corporation to management personnel as a means of additional compensation and motivation of these employees.

A corporation cannot declare a dividend that would cause stockholders' equity to fall below the legal capital.

Holders of preferred stock normally do not have

Par value

A corporation's residual equity is its

Stockholders who own preferred stock usually do not have voting rights,whereas stockholders who own common stock usually have voting rights.

Outstanding shares of stock are

Which of the following items will not be disclosed on a statement of stockholders' equity?

A corporation often uses an underwriter to guarantee the sale of stock in an initial public offering (IPO).

Start-up and organization costs should be expensed as incurred.

The information that follows pertains to stockholders' equity data of Frame Corporation on December 31,20x5.Compute the amount of each item indicated by a letter in the listing below.

Return on equity equals net income divided by average stockholders' equity.

The following facts pertain to Quail Corporation: On the basis of these facts,compute the amount of net income (loss)for Quail Corporation for 20x5.

A 2-for-1 stock split will have the same effect on the number of shares outstanding as a 200 percent stock dividend.

How should dividends in arrears be shown on a corporation's balance sheet?

Cash dividends become a liability of a corporation when the stock goes ex-dividend.

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Supplement: Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Long Term Liabilities

The Statement of Cash Flows

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters

Exam 13: Accounting for Corporations

The par value of treasury stock is deducted from total Contributed Capital and Retained Earnings in determining total stockholders' equity.

Stock options often are granted by a corporation to management personnel as a means of additional compensation and motivation of these employees.

A corporation cannot declare a dividend that would cause stockholders' equity to fall below the legal capital.

Holders of preferred stock normally do not have

Par value

A corporation's residual equity is its

Stockholders who own preferred stock usually do not have voting rights,whereas stockholders who own common stock usually have voting rights.

Outstanding shares of stock are

Which of the following items will not be disclosed on a statement of stockholders' equity?

A corporation often uses an underwriter to guarantee the sale of stock in an initial public offering (IPO).

Start-up and organization costs should be expensed as incurred.

The information that follows pertains to stockholders' equity data of Frame Corporation on December 31,20x5.Compute the amount of each item indicated by a letter in the listing below.

Return on equity equals net income divided by average stockholders' equity.

The following facts pertain to Quail Corporation: On the basis of these facts,compute the amount of net income (loss)for Quail Corporation for 20x5.

A 2-for-1 stock split will have the same effect on the number of shares outstanding as a 200 percent stock dividend.

How should dividends in arrears be shown on a corporation's balance sheet?

Cash dividends become a liability of a corporation when the stock goes ex-dividend.

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Supplement: Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Long Term Liabilities

The Statement of Cash Flows

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters