Question 1

What is the difference between the par value of a stock and its market value?

Accepted Answer

The answer of What is the difference between the par...

Question 2

Describe ratios used to analyze shareholders' equity.

Accepted Answer

The answer of Describe ratios used to analyze shareholders' equity....

Question 3

Dividends decrease contributed capital.

Accepted Answer

A) True 
 B)False

Question 4

One of Bull Beary,Inc.'s financial statements included the following section:

Accepted Answer

The answer of One of Bull Beary,Inc.'s financial statements included...

Question 5

Out of Africa,a multi-national corporation had a very successful year.The board of directors declared and paid a cash dividend of $50,000.The prior year,Out of Africa did not pay dividends on its 400 shares of cumulative,8%,$100 par,preferred stock.How much of the cash dividend was paid to the PREFERRED shareholders?

Accepted Answer

A) $6,400 
B) $3,200 
C) $8,000 
D) $4,000

Question 6

Angelique's Antiques declared and paid cash dividends of $25,000.There were 1,000 shares of 10%,$30 par value,noncumulative preferred stock outstanding.How much of the cash dividends were paid to COMMON  shareholders?

Accepted Answer

A) $0 
B) $1,500 
C) $22,000 
D) $25,000

Question 7

How many of these will decrease a corporation's retained earnings? ∙ a stock split
∙ paying a stock dividend
∙ paying a cash dividend
∙ buying treasury stock

Accepted Answer

A) one 
B) two 
C) three 
D) all four

Question 8

Dividends ________.

Accepted Answer

A) are the distribution of profits 
B) are expenses and cause shareholders' equity to decrease 
C) cause retained earnings to increase 
D) cause common stock to decrease

Question 9

The number of shares of treasury stock plus the number of shares outstanding equals the total amount of ________.

Accepted Answer

A) issued stock 
B) voting stock 
C) stock authorized 
D) stock entitled to dividends

Question 10

Treasury stock is shown as an increase in shareholders' equity on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 11

The state charter of Team Shirts authorizes the corporation to sell 300,000 shares.Team Shirts has issued 200,000 shares of stock.There are 7,500 shares of treasury stock.The number of outstanding shares is ________.

Accepted Answer

A) 300,000 
B) 200,000 
C) 192,500 
D) 7,500

Question 12

Explain the difference between authorized,issued,treasury and outstanding stock.

Accepted Answer

The answer of Explain the difference between authorized,issued,treasury and outstanding...

Question 13

Par For the Course,Inc.'s financial statement included the following section:

Accepted Answer

The answer of Par For the Course,Inc.'s financial statement included...

Question 14

Which of the following will decrease a company's retained earnings?

Accepted Answer

A) earning net income of $50,000 for the year 
B) issuing additional shares of common stock at a price above par 
C) buying additional shares of treasury stock 
D) declaring cash dividends of $0.50 per share

Question 15

Lee's Lions issued 15,000 shares of stock for $17 per share.The par value of the stock was $0.50 per share.Calculate the value of capital stock and additional paid-in capital.

Accepted Answer

A) capital stock $0; additional paid-in capital $255,000 
B) capital stock $7,500; additional paid-in capital $247,500 
C) capital stock $247,500; additional paid-in capital $7,500 
D) capital stock $255,000; additional paid-in capital $0

Question 16

Use the information below to answer the following question: Common stock,$1 par,100,000 shares
 How much of this company's capital was paid-in by shareholders?

Accepted Answer

A) $ 50,000 
B) $250,000 
C) $300,000 
D) $396,000

Question 17

Return on equity is calculated by dividing total shareholders' equity by the total amount of income earned for an accounting period.

Accepted Answer

A) True 
 B)False

Question 18

Vest,Inc.received cash from selling 100 shares of its $1 par value common stock at $10 per share.Show the effect of issuing stock on the accounting equation,including both account titles and amounts.

Accepted Answer

The answer of Vest,Inc.received cash from selling 100 shares of...

Question 19

AZ Best,Inc.'s corporate charter allows it to issue 1,500,000 shares of common stock.In 2011,its first year of business,the company sold 200,000 shares of common stock.In 2011,the company bought back 5,000 shares to be held as treasury stock.At December 31,2011,how many shares of common stock are authorized?

Accepted Answer

A) 5,000 shares 
B) 1,300,000 shares 
C) 200,000 shares 
D) 1,500,000 shares

Question 20

When a company issues additional shares of stock during the year,its earnings per share will most likely decrease.

Accepted Answer

A) True 
 B)False

Exam 8: Accounting for Shareholders Equity

What is the difference between the par value of a stock and its market value?

Describe ratios used to analyze shareholders' equity.

Dividends decrease contributed capital.

One of Bull Beary,Inc.'s financial statements included the following section:

Angelique's Antiques declared and paid cash dividends of $25,000.There were 1,000 shares of 10%,$30 par value,noncumulative preferred stock outstanding.How much of the cash dividends were paid to COMMON shareholders?

How many of these will decrease a corporation's retained earnings? ∙ a stock split ∙ paying a stock dividend ∙ paying a cash dividend ∙ buying treasury stock

Dividends ________.

The number of shares of treasury stock plus the number of shares outstanding equals the total amount of ________.

Treasury stock is shown as an increase in shareholders' equity on the balance sheet.

The state charter of Team Shirts authorizes the corporation to sell 300,000 shares.Team Shirts has issued 200,000 shares of stock.There are 7,500 shares of treasury stock.The number of outstanding shares is ________.

Explain the difference between authorized,issued,treasury and outstanding stock.

Par For the Course,Inc.'s financial statement included the following section:

Which of the following will decrease a company's retained earnings?

Lee's Lions issued 15,000 shares of stock for $17 per share.The par value of the stock was $0.50 per share.Calculate the value of capital stock and additional paid-in capital.

Use the information below to answer the following question: Common stock,$1 par,100,000 shares How much of this company's capital was paid-in by shareholders?

Return on equity is calculated by dividing total shareholders' equity by the total amount of income earned for an accounting period.

Vest,Inc.received cash from selling 100 shares of its $1 par value common stock at $10 per share.Show the effect of issuing stock on the accounting equation,including both account titles and amounts.

When a company issues additional shares of stock during the year,its earnings per share will most likely decrease.