Question 1

A share dividend:

Accepted Answer

A)  Is a distribution of additional shares to its shareholders without receiving any payment. 
B)  Transfers a portion of equity from retained earnings to contributed capital. 
C)  Is often referred to as a stock dividend. 
D)  Does not reduce a corporation's assets and equity. 
E)  All of these answers are correct.

Question 2

Retirement of shares:

Accepted Answer

A)  Reduces the number of issued shares. 
B)  Is permissible under law if the interest of the shareholders is not jeopardized. 
C)  Is accounted for like treasury shares. 
D)  Reduces the number of issued shares and is permissible under law if the interest of the shareholders is not jeopardized. 
E)  All of these answers are correct.

Question 3

Reporting for discontinued operations includes:

Accepted Answer

A)  Income or loss from operating the discontinued segment (net of tax). 
B)  Gain or loss from disposal of the segment's net assets (net of tax). 
C)  Income or loss from operating the discontinued operations (net of tax)and gain or loss from disposal of the operation's net assets (net of tax). 
D)  Tax benefits of the discontinued segment. 
E)  All of these answers are correct.

Question 4

A cash dividend does not reduce a corporation's assets or equity,while a share dividend reduces both.

Accepted Answer

A) True 
 B)False

Question 5

Changes in accounting estimates are treated as accounting errors.

Accepted Answer

A) True 
 B)False

Question 6

A corporation began the year with $550,000 of retained earnings,reported $140,000 net income,declared $45,000 of cash dividends,paid $50,000 in cash dividends,and purchased treasury shares costing $40,000.Calculate the end-of-year balance in retained earnings.

Accepted Answer

The answer of A corporation began the year with $550,000...

Question 7

Seven Corporation originally issued its common shares at $35 per share.
(1)Prepare a journal entry to record the purchase and retirement of 500 shares if Seven Corporation paid $30 per share.The company has a retained earnings balance of $50,000.
(2)Prepare a journal entry to record the purchase and retirement of 500 shares if Seven Corporation paid $40 per share.

Accepted Answer

The answer of Seven Corporation originally issued its common shares...

Question 8

Record the following BJ Corp.transactions in general journal form:
(a)Reacquired 8,000 of its own common shares at $60 per share to be held as treasury shares.The shares were originally issued at $15 per share.
(b)Sold 2,000 shares reacquired under part (a)above at $63 per share.
(c)Sold 3,000 shares reacquired under part (a)at $59 per share.
(d)Retired the remaining shares reacquired under part (a).

Accepted Answer

The answer of Record the following BJ Corp.transactions in general...

Question 9

Treasury shares are recorded as a(n):

Accepted Answer

A)  Asset. 
B)  Contra asset. 
C)  Equity. 
D)  Contra equity. 
E)  Liability.

Question 10

Explain the procedure to record the purchase and sale of treasury shares.

Accepted Answer

The answer of Explain the procedure to record the purchase...

Question 11

Earnings per share is the amount of income earned by each share of a company's outstanding common shares.

Accepted Answer

A) True 
 B)False

Question 12

McJunkin Ltd.declares a 10% share dividend on December 31,2015.Currently McJunkin has 30,000 shares outstanding.The market value of the shares on the date of declaration is $3 per share.The value to be assigned to this share dividend is:

Accepted Answer

A)  $5,000. 
B)  $8,000. 
C)  $2,000. 
D)  $6,000. 
E)  $9,000.

Question 13

Share dividends are recorded at market value.

Accepted Answer

A) True 
 B)False

Question 14

The amount of income earned by each outstanding common share of a corporation is known as:

Accepted Answer

A)  Restricted retained earnings. 
B)  Income from continuing operations. 
C)  Earnings per share. 
D)  Dividends payable. 
E)  A share dividend.

Question 15

Beta Inc.had the following equity as of December 31,Year 1:  The following transactions related to the company's shares took place during Year 2:  Prepare the journal entries to record the Year 2 transactions.

Accepted Answer

The answer of Beta Inc.had the following equity as of...

Question 16

For each of the following independent situations,present the necessary journal entry:
(a)Declared and distributed a 10% share dividend on 500,000 shares of common shares outstanding.Market price per share on this date was $15.
(b)With 250,000 shares of common shares outstanding,declared and distributed a 2 for 1 share split.
(c)Declared and distributed a 30% share dividend on 200,000 shares of common shares outstanding.Market price per share on this date was $14.

Accepted Answer

The answer of For each of the following independent situations,present...

Question 17

A company can change from one acceptable accounting principle to another as long as the change improves the usefulness of information in its financial statements or it is required by IFRS.

Accepted Answer

A) True 
 B)False

Question 18

North American Construction Corp.has three lines of business including surveying,excavating and planning.These product lines are considered to be:

Accepted Answer

A)  Other comprehensive income. 
B)  Discontinued operations. 
C)  Operating segments. 
D)  Contributed capital. 
E)  All of these answers are correct.

Question 19

Explain the form and content of an expanded income statement for a corporation with discontinued operations.

Accepted Answer

The answer of Explain the form and content of an...

Question 20

If a company resells treasury shares below the acquisition cost,then it must report a loss from the sale of treasury shares.

Accepted Answer

A) True 
 B)False

Exam 14: Corporate Reporting: Income,earnings Per Share,and Retained Earnings

A share dividend:

Retirement of shares:

Reporting for discontinued operations includes:

A cash dividend does not reduce a corporation's assets or equity,while a share dividend reduces both.

Changes in accounting estimates are treated as accounting errors.

A corporation began the year with $550,000 of retained earnings,reported $140,000 net income,declared $45,000 of cash dividends,paid $50,000 in cash dividends,and purchased treasury shares costing $40,000.Calculate the end-of-year balance in retained earnings.

Treasury shares are recorded as a(n) :

Explain the procedure to record the purchase and sale of treasury shares.

Earnings per share is the amount of income earned by each share of a company's outstanding common shares.

McJunkin Ltd.declares a 10% share dividend on December 31,2015.Currently McJunkin has 30,000 shares outstanding.The market value of the shares on the date of declaration is $3 per share.The value to be assigned to this share dividend is:

Share dividends are recorded at market value.

The amount of income earned by each outstanding common share of a corporation is known as:

Beta Inc.had the following equity as of December 31,Year 1: The following transactions related to the company's shares took place during Year 2: Prepare the journal entries to record the Year 2 transactions.

A company can change from one acceptable accounting principle to another as long as the change improves the usefulness of information in its financial statements or it is required by IFRS.

North American Construction Corp.has three lines of business including surveying,excavating and planning.These product lines are considered to be:

Explain the form and content of an expanded income statement for a corporation with discontinued operations.

If a company resells treasury shares below the acquisition cost,then it must report a loss from the sale of treasury shares.