Question 1

On November 1, 2018, Tech Corporation's stockholders' equity section is as follows:  On November 1, Tech declares and distributes a 15% stock dividend when the market value of the stock is $16 per share.
Instructions
Indicate the balances in the stockholders' equity accounts after the stock dividend has been distributed.

Accepted Answer

The answer of On November 1, 2018, Tech Corporation's stockholders'...

Question 2

The officer who is generally responsible for maintaining the cash position of the corporation is the

Accepted Answer

A)  controller. 
B)  treasurer. 
C)  cashier. 
D)  internal auditor.

Question 3

On November 27, the board of directors of Armstrong Company declared a $.50 per share dividend. The dividend is payable to shareholders of record on December 7 on December 24. Armstrong has 25,500 shares of $1 par common stock outstanding at November 27. Journalize the entries needed on the declaration and payment dates.

Accepted Answer

The answer of On November 27, the board of directors...

Question 4

Previously issued financial statements with errors are required to be restated under

Accepted Answer

A)  GAAP only. 
B)  IFRS only. 
C)  Both GAAP and IFRS. 
D)  Neither GAAP nor IFRS.

Question 5

The cumulative effect of the declaration and payment of a cash dividend on a company's balance sheet is to

Accepted Answer

A)  decrease current liabilities and stockholders' equity. 
B)  increase total assets and stockholders' equity. 
C)  increase current liabilities and stockholders' equity. 
D)  decrease stockholders' equity and total assets.

Question 6

The following selected transactions pertain to Sinclair Corporation:
Jan. 3 Issued 100,000 shares, $5 par value, common stock for $25 per share.
Feb. 10 Issued 6,000 shares, $5 par value, common stock in exchange for special purpose equipment. Sinclair Corporation's common stock has been actively traded on the stock exchange at $30 per share.
Instructions
Journalize the transactions.

Accepted Answer

The answer of The following selected transactions pertain to Sinclair...

Question 7

The following information is available for Pencil Corporation: Common Stock ($5 par) $ \$ 1,600,000 $
Retained Earnings $ \quad 1,300,000 $ A 20% stock dividend is declared and paid when the market value was $16 per share.
Instructions
Compute each of the following after the stock dividend.
(a) Total stockholders' equity.
(b) Number of shares outstanding.

Accepted Answer

The answer of The following information is available for Pencil...

Question 8

eris, Inc. has 1,000 shares of 6%, $10 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2018. What is the annual dividend on the preferred stock?

Accepted Answer

A)  $6 per share 
B)  $600 in total 
C)  $6,000 in total 
D)  $.06 per share

Question 9

BE 261
Domaine Corporation is authorized to issue 1,000,000 shares of $1 par value common stock. During 2018, the company has the following stock transactions.
Jan. 15 Issued 500,000 shares of stock at $7 per share.
Sept. 5 Purchased 30,000 shares of common stock for the treasury at $9 per share.
Instructions
Journalize the transactions for Domaine Corporation.

Accepted Answer

The answer of BE 261
Domaine Corporation is authorized to issue...

Question 10

Bacon Corporation began business by issuing 180,000 shares of $5 par value common stock for $25 per share. During its first year, the corporation sustained a net loss of $30,000. The year-end balance sheet would show

Accepted Answer

A)  Common stock of $900,000. 
B)  Common stock of $4,500,000. 
C)  Total paid-in capital of $4,470,000. 
D)  Total paid-in capital of $930,000.

Question 11

Accounting for treasury stock is done by the

Accepted Answer

A)  FIFO method. 
B)  LIFO method. 
C)  cost method. 
D)  lower of cost or market method.

Question 12

The amount of a cash dividend liability is recorded on the date of record because it is on that date that the persons or entities who will receive the dividend are identified.

Accepted Answer

A) True 
 B)False

Question 13

A statement of stockholders' equity discloses all of the following except:

Accepted Answer

A)  The cost of treasury stock owned at the end of the year. 
B)  Net income for the current year. 
C)  The amount of cash dividends declared during the current year. 
D)  The market value of the stockholders' equity at the end of the year.

Question 14

On January 2, 2015, Porter Corporation issued 30,000 shares of 5% cumulative preferred stock at $100 par value. On December 31, 2018, Porter Corporation declared and paid its first dividend. What dividends are the preferred stockholders entitled to receive in the current year before any distribution is made to common stockholders?

Accepted Answer

A)  $0 
B)  $150,000 
C)  $450,000 
D)  $600,000

Question 15

IFRS treats the purchase of treasury stock as any of the following except

Accepted Answer

A)  an increase to a contra equity account. 
B)  a decrease to retained earnings. 
C)  a decrease to share capital. 
D)  a decrease to share premium.

Question 16

Treasury stock is generally accounted for by the

Accepted Answer

A)  cost method. 
B)  market value method. 
C)  par value method. 
D)  stated value method.

Question 17

A corporation commits to a legal obligation when it declares

Accepted Answer

A)  a cash dividend. 
B)  either a cash dividend or a stock dividend. 
C)  a stock dividend. 
D)  a distribution date.

Question 18

Jarrett Company issued 900 shares of no-par common stock for $13,200. Which of the following journal entries would be made if the stock has no stated value?

Accepted Answer

The answer of Jarrett Company issued 900 shares of no-par...

Question 19

A debit balance in the Retained Earnings account is identified as a deficit.

Accepted Answer

A) True 
 B)False

Question 20

Book value per share of common stock is the same amount as the market value per share.

Accepted Answer

A) True 
 B)False

Exam 11: Corporations: Organization, Stock Transactions

The officer who is generally responsible for maintaining the cash position of the corporation is the

Previously issued financial statements with errors are required to be restated under

The cumulative effect of the declaration and payment of a cash dividend on a company's balance sheet is to

eris, Inc. has 1,000 shares of 6%, $10 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2018. What is the annual dividend on the preferred stock?

Bacon Corporation began business by issuing 180,000 shares of $5 par value common stock for $25 per share. During its first year, the corporation sustained a net loss of $30,000. The year-end balance sheet would show

Accounting for treasury stock is done by the

The amount of a cash dividend liability is recorded on the date of record because it is on that date that the persons or entities who will receive the dividend are identified.

A statement of stockholders' equity discloses all of the following except:

IFRS treats the purchase of treasury stock as any of the following except

Treasury stock is generally accounted for by the

A corporation commits to a legal obligation when it declares

Jarrett Company issued 900 shares of no-par common stock for $13,200. Which of the following journal entries would be made if the stock has no stated value?

A debit balance in the Retained Earnings account is identified as a deficit.

Book value per share of common stock is the same amount as the market value per share.