Question 1

Significant changes in stockholders' equity are reported in

Accepted Answer

A)  income statement 
B)  retained earnings statement 
C)  statement of stockholders' equity 
D)  statement of cash flows 
A)  income statement 
B)  retained earnings statement 
C)  statement of stockholders' equity 
D)  statement of cash flows

Question 2

A corporation has 50,000 shares of $28 par stock outstanding that has a current market value of $150 per share. If the corporation issues a 4-for-1 stock split, the market value of the stock will fall to approximately

Accepted Answer

A)  $7.00 
B)  $112.00 
C)  $37.50 
D)  $600.00 
A)  $7.00 
B)  $112.00 
C)  $37.50 
D)  $600.00

Question 3

Characteristics of a corporation include

Accepted Answer

A)  shareholders who are mutual agents 
B)  direct management by the shareholders owners) 
C)  its inability to own property 
D)  shareholders who have limited liability 
A)  shareholders who are mutual agents 
B)  direct management by the shareholders owners) 
C)  its inability to own property 
D)  shareholders who have limited liability

Question 4

Oregon, Inc. reported net income of $105,000. During the current year, the company had 5,000 shares of $100 par, 5% preferred stock and 10,000 of $5 par common stock outstanding. Oregon's earnings per share is

Accepted Answer

A)  $8.00 
B)  $18.00 
C)  $5.08 
D)  $5.00 
A)  $8.00 
B)  $18.00 
C)  $5.08 
D)  $5.00

Question 5

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 30,000 shares were originally issued and 5,000 were subsequently reacquired. What is the number of shares outstanding?

Accepted Answer

A)  35,000 
B)  70,000 
C)  25,000 
D)  30,000 
A)  35,000 
B)  70,000 
C)  25,000 
D)  30,000

Question 6

The number of shares of outstanding stock is equal to the number of shares authorized minus the number of shares issued.

Accepted Answer

A) True 
 B)False

Question 7

Paid-in capital may originate from real estate transactions.

Accepted Answer

A) True 
 B)False

Question 8

The amount of capital paid in by the stockholders of the corporation is called legal capital.

Accepted Answer

A) True 
 B)False

Question 9

Match the following stockholders' equity concepts to the appropriate term a-h).
-Owners of this class of stock are entitled to receive dividends first

Accepted Answer

A) cash dividend 
B) date of record 
C) Stock Dividends Distributable 
D) date of declaration 
E) treasury stock
F)preferred stock
G)date of payment
H)Paid-In Capital in Excess of Par 
A) cash dividend 
B) date of record 
C) Stock Dividends Distributable 
D) date of declaration 
E) treasury stock
F)preferred stock
G)date of payment
H)Paid-In Capital in Excess of Par

Question 10

Which of the following is not a characteristic of a corporation?

Accepted Answer

A)  The financial loss that a stockholder may suffer from owning stock in a public company is limited. 
B)  Cash dividends paid by a corporation are deductible as expenses by the corporation. 
C)  A corporation can own property in its name. 
D)  Corporations are required to file federal income tax returns. 
A)  The financial loss that a stockholder may suffer from owning stock in a public company is limited. 
B)  Cash dividends paid by a corporation are deductible as expenses by the corporation. 
C)  A corporation can own property in its name. 
D)  Corporations are required to file federal income tax returns.

Question 11

For the current year ended, ABC had the following transactions:
- Issued 10,000 shares of $2.00 par value common stock for $12.00 per share.
- Issued 3,000 shares of $50 par value 6% preferred stock for $70 per share.
- Purchased 1,000 shares of previously issued common stock for $15.00 per share.
- Reported net income of $200,000.
- Declared and paid a total dividend of $40,000.
Assume that retained earnings had a beginning balance of $75,000.

-$20,000

Accepted Answer

A)  Treasury stock 
B)  Retained earnings 
C)  Preferred stock 
D)  Excess of issue price over par preferred) 
E) Common stock
F) Total paid-in capital
G) Excess of issue price over par common)h. Total stockholders' equity 
A)  Treasury stock 
B)  Retained earnings 
C)  Preferred stock 
D)  Excess of issue price over par preferred) 
E) Common stock
F) Total paid-in capital
G) Excess of issue price over par common)h. Total stockholders' equity

Question 12

On April 1, 10,000 shares of $5 par common stock were issued at $22, and on April 7, 5,000 shares of $50 par preferred stock were issued at $104. Journalize the entries for April 1 and 7.

Accepted Answer

Apr. 1
Cash
220,000
Common Sto

Question 13

Which of the following is not a right possessed by common stockholders of a corporation?

Accepted Answer

A)  the right to vote in the election of the board of directors 
B)  the right to receive a minimum amount of dividends 
C)  the right to sell their stock to anyone they choose 
D)  the right to share in assets upon liquidation 
A)  the right to vote in the election of the board of directors 
B)  the right to receive a minimum amount of dividends 
C)  the right to sell their stock to anyone they choose 
D)  the right to share in assets upon liquidation

Question 14

The declaration of a cash dividend decreases a corporation's stockholders equity and decreases its assets.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements concerning taxation is accurate?

Accepted Answer

A)  Corporations pay federal income taxes but not state income taxes. 
B)  Corporations pay federal and state income taxes. 
C)  Only the owners must pay taxes on corporate income. 
D)  Corporations pay income taxes but their owners do not. 
A)  Corporations pay federal income taxes but not state income taxes. 
B)  Corporations pay federal and state income taxes. 
C)  Only the owners must pay taxes on corporate income. 
D)  Corporations pay income taxes but their owners do not.

Question 16

Nevada Corporation has 30,000 shares of $25 par stock outstanding that has a current market value of $120. If the corporation issues a 5-for-1 stock split, the number of shares outstanding will be

Accepted Answer

A)  60,000 
B)  6,000 
C)  150,000 
D)  15,000 
A)  60,000 
B)  6,000 
C)  150,000 
D)  15,000

Question 17

On May 1, 10,000 shares of $10 par common stock were issued at $30, and on May 7, 5,000 shares of $50 par preferred stock were issued at $111. Journalize the entries for May 1 and May 7.

Accepted Answer

May 1
Cash
300,000
Common Stoc

Question 18

A corporation has 10,000 shares of $100 par stock outstanding. If the corporation issues a 5-for-1 stock split, the number of shares outstanding after the split will be 40,000.

Accepted Answer

A) True 
 B)False

Question 19

Cash dividends are normally paid on shares of treasury stock.

Accepted Answer

A) True 
 B)False

Question 20

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends: Year 1:
$10,000
Year 2:
45,000
Year 3:
90,000
Determine the dividends per share for preferred and common stock for the first year.

Accepted Answer

A)  $0.50 and $0.10 
B)  $0.00 and $0.10 
C)  $0.50 and $0.00 
D)  $2.00 and $0.00 
A)  $0.50 and $0.10 
B)  $0.00 and $0.10 
C)  $0.50 and $0.00 
D)  $2.00 and $0.00

Exam 11: Corporations: Organization, Stock Transactions, and Dividends

Significant changes in stockholders' equity are reported in

A corporation has 50,000 shares of $28 par stock outstanding that has a current market value of $150 per share. If the corporation issues a 4-for-1 stock split, the market value of the stock will fall to approximately

Characteristics of a corporation include

Oregon, Inc. reported net income of $105,000. During the current year, the company had 5,000 shares of $100 par, 5% preferred stock and 10,000 of $5 par common stock outstanding. Oregon's earnings per share is

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 30,000 shares were originally issued and 5,000 were subsequently reacquired. What is the number of shares outstanding?

The number of shares of outstanding stock is equal to the number of shares authorized minus the number of shares issued.

Paid-in capital may originate from real estate transactions.

The amount of capital paid in by the stockholders of the corporation is called legal capital.

Match the following stockholders' equity concepts to the appropriate term a-h). -Owners of this class of stock are entitled to receive dividends first

Which of the following is not a characteristic of a corporation?

On April 1, 10,000 shares of $5 par common stock were issued at $22, and on April 7, 5,000 shares of $50 par preferred stock were issued at $104. Journalize the entries for April 1 and 7.

Which of the following is not a right possessed by common stockholders of a corporation?

The declaration of a cash dividend decreases a corporation's stockholders equity and decreases its assets.

Which of the following statements concerning taxation is accurate?

Nevada Corporation has 30,000 shares of $25 par stock outstanding that has a current market value of $120. If the corporation issues a 5-for-1 stock split, the number of shares outstanding will be

On May 1, 10,000 shares of $10 par common stock were issued at $30, and on May 7, 5,000 shares of $50 par preferred stock were issued at $111. Journalize the entries for May 1 and May 7.

A corporation has 10,000 shares of $100 par stock outstanding. If the corporation issues a 5-for-1 stock split, the number of shares outstanding after the split will be 40,000.

Cash dividends are normally paid on shares of treasury stock.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

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