Question 1

Two classifications appearing in the paid-in capital section of the balance sheet are

Accepted Answer

A)  preferred stock and common stock. 
B)  paid-in capital and retained earnings. 
C)  capital stock and additional paid-in capital. 
D)  capital stock and treasury stock. 
A)  preferred stock and common stock. 
B)  paid-in capital and retained earnings. 
C)  capital stock and additional paid-in capital. 
D)  capital stock and treasury stock.

Question 2

Which one of the following events would not require a journal entry on a corporation's books?

Accepted Answer

A)  2-for-1 stock split. 
B)  100% stock dividend. 
C)  2% stock dividend. 
D)  $1 per share cash dividend. 
A)  2-for-1 stock split. 
B)  100% stock dividend. 
C)  2% stock dividend. 
D)  $1 per share cash dividend.

Question 3

The term legal capital is a descriptive term for

Accepted Answer

A)  stockholders' equity. 
B)  par value. 
C)  residual equity. 
D)  market value. 
A)  stockholders' equity. 
B)  par value. 
C)  residual equity. 
D)  market value.

Question 4

Nance Corporation's December 31, 2014 balance sheet showed the following:   Nance declared and paid a $75,000 cash dividend on December 15, 2014. If the company's dividends in arrears prior to that date were $18,000, Nance's common stockholders received

Accepted Answer

A)  $57,000. 
B)  $27,000. 
C)  $33,000. 
D)  no dividend. 
A)  $57,000. 
B)  $27,000. 
C)  $33,000. 
D)  no dividend.

Question 5

From the information below, compute the payout ratio for Kevin's Trailers. $$\begin{array} { l r } 
\text { Net Income } & \$ 200 \
\text { Cash Dividends (common) } & 40 \
\text { Retained Earnings } & 500 \
\text { Stock Dividends (common) } & 10
\end{array}$$

Accepted Answer

A)  25%. 
B)  20%. 
C)  8%. 
D)  2%. 
A)  25%. 
B)  20%. 
C)  8%. 
D)  2%.

Question 6

On January 1 Weiss Corporation had 60,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following transactions occurred:   Instructions
(a) Prepare the entries, if any, on each of the three dates that involved dividends.
(b) How are dividends and dividends payable reported in the financial statements prepared at December 31?

Accepted Answer

@#IMG-DLM& (b) In the retained earnings

Question 7

Which of the following statements reflects the transferability of ownership rights in a corporation?

Accepted Answer

A)  If a stockholder decides to transfer ownership, he must transfer all of his shares. 
B)  A stockholder may dispose of part or all of his shares. 
C)  A stockholder must obtain permission of the board of directors before selling shares. 
D)  A stockholder must obtain permission from at least three other stockholders before selling shares. 
A)  If a stockholder decides to transfer ownership, he must transfer all of his shares. 
B)  A stockholder may dispose of part or all of his shares. 
C)  A stockholder must obtain permission of the board of directors before selling shares. 
D)  A stockholder must obtain permission from at least three other stockholders before selling shares.

Question 8

CAB Inc. has 1,000 shares of 6%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2014. What is the annual dividend on the preferred stock?

Accepted Answer

A)  $60 per share. 
B)  $6,000 in total. 
C)  $600 in total. 
D)  $0.60 per share. 
A)  $60 per share. 
B)  $6,000 in total. 
C)  $600 in total. 
D)  $0.60 per share.

Question 9

If Pratt Company issues 5,000 shares of $5 par value common stock for $210,000, the account

Accepted Answer

A)  Common Stock will be credited for $185,000. 
B)  Paid-in Capital in Excess of Par Value will be credited for $210,000. 
C)  Paid-in Capital in Excess of Par Value will be credited for $235,000. 
D)  Cash will be debited for $210,000. 
A)  Common Stock will be credited for $185,000. 
B)  Paid-in Capital in Excess of Par Value will be credited for $210,000. 
C)  Paid-in Capital in Excess of Par Value will be credited for $235,000. 
D)  Cash will be debited for $210,000.

Question 10

The return on common stockholders' equity is computed by dividing net income

Accepted Answer

A)  by ending common stockholders' equity. 
B)  by average common stockholders' equity. 
C)  less preferred dividends by ending common stockholders' equity. 
D)  less preferred dividends by average common stockholders' equity. 
A)  by ending common stockholders' equity. 
B)  by average common stockholders' equity. 
C)  less preferred dividends by ending common stockholders' equity. 
D)  less preferred dividends by average common stockholders' equity.

Question 11

Treasury shares plus outstanding shares equal

Accepted Answer

A)  authorized stock. 
B)  issued stock. 
C)  unissued stock. 
D)  distributable stock. 
A)  authorized stock. 
B)  issued stock. 
C)  unissued stock. 
D)  distributable stock.

Question 12

Treasury stock is a contra stockholders' equity account.

Accepted Answer

A) True 
 B)False

Question 13

If a corporation pays taxes on its income, then stockholders will not have to pay taxes on the dividends received from that corporation.

Accepted Answer

A) True 
 B)False

Question 14

A corporation has the following account balances: Common Stock, $1 par value, $80,000; Paid-in Capital in Excess of Par Value, $2,700,000. Based on this information, the

Accepted Answer

A)  legal capital is $2,780,000. 
B)  number of shares issued is 80,000. 
C)  number of shares outstanding is 2,780,000. 
D)  average price per share issued is $3.48. 
A)  legal capital is $2,780,000. 
B)  number of shares issued is 80,000. 
C)  number of shares outstanding is 2,780,000. 
D)  average price per share issued is $3.48.

Question 15

Three important dates associated with dividends are the: (1)___________________, (2)__________________, and (3)__________________.

Accepted Answer

declaratio

Question 16

All of the following statements regarding retained earnings are true except

Accepted Answer

A)  retained earnings represents a claim on cash. 
B)  a debit balance in Retained Earnings indicates a deficit. 
C)  some companies may restrict availability of retained earnings for dividends. 
D)  retained earnings is net income that a company retains in a business. 
A)  retained earnings represents a claim on cash. 
B)  a debit balance in Retained Earnings indicates a deficit. 
C)  some companies may restrict availability of retained earnings for dividends. 
D)  retained earnings is net income that a company retains in a business.

Question 17

The two ways that a corporation can be classified by ownership are

Accepted Answer

A)  publicly held and privately held. 
B)  stock and non-stock. 
C)  inside and outside. 
D)  majority and minority. 
A)  publicly held and privately held. 
B)  stock and non-stock. 
C)  inside and outside. 
D)  majority and minority.

Question 18

A corporation purchases 15,000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?

Accepted Answer

A)  Increase by $525,000. 
B)  Decrease by $300,000. 
C)  Decrease by $525,000. 
D)  Decrease by $225,000. 
A)  Increase by $525,000. 
B)  Decrease by $300,000. 
C)  Decrease by $525,000. 
D)  Decrease by $225,000.

Question 19

During 2014 Kenton Corporation had the following transactions and events:
1. Issued par value preferred stock for cash at par value
2. Issued par value common stock for cash at an amount greater than par value
3. Completed a 2 for 1 stock split in which the $10 par value common stock was changed to $5 par value stock
*4. Declared a small stock dividend when the market value was higher than the par value
5. Declared a cash dividend
*6. Issued the shares of common stock required by the stock dividend declaration in 4. above
7. Issued par value common stock for cash at par value
8. Paid the cash dividend
Instructions
Indicate the effect(s) of each of the foregoing items on the subdivisions of stockholders' equity. Present your answers in tabular form with the following columns. Use (I) for increase, (D) for decrease, and (NE) for no effect.

Accepted Answer

The answer of During 2014 Kenton Corporation had the following...

Question 20

Dividends in arrears are liabilities of the corporation.

Accepted Answer

A) True 
 B)False

Two classifications appearing in the paid-in capital section of the balance sheet are

Which one of the following events would not require a journal entry on a corporation's books?

The term legal capital is a descriptive term for

Nance Corporation's December 31, 2014 balance sheet showed the following: Nance declared and paid a $75,000 cash dividend on December 15, 2014. If the company's dividends in arrears prior to that date were $18,000, Nance's common stockholders received

From the information below, compute the payout ratio for Kevin's Trailers. Net Income \ 200 Cash Dividends (common) 40 Retained Earnings 500 Stock Dividends (common) 10

Which of the following statements reflects the transferability of ownership rights in a corporation?

CAB Inc. has 1,000 shares of 6%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2014. What is the annual dividend on the preferred stock?

If Pratt Company issues 5,000 shares of $5 par value common stock for $210,000, the account

The return on common stockholders' equity is computed by dividing net income

Treasury shares plus outstanding shares equal

Treasury stock is a contra stockholders' equity account.

If a corporation pays taxes on its income, then stockholders will not have to pay taxes on the dividends received from that corporation.

A corporation has the following account balances: Common Stock, $1 par value, $80,000; Paid-in Capital in Excess of Par Value, $2,700,000. Based on this information, the

Three important dates associated with dividends are the: (1)_, (2), and (3)__.

All of the following statements regarding retained earnings are true except

The two ways that a corporation can be classified by ownership are

A corporation purchases 15,000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?

Dividends in arrears are liabilities of the corporation.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments and Acquisitions in Accounting

Filters

Exam 11: Reporting and Analyzing Stockholders Equity

Two classifications appearing in the paid-in capital section of the balance sheet are

Which one of the following events would not require a journal entry on a corporation's books?

The term legal capital is a descriptive term for

Nance Corporation's December 31, 2014 balance sheet showed the following: Nance declared and paid a $75,000 cash dividend on December 15, 2014. If the company's dividends in arrears prior to that date were $18,000, Nance's common stockholders received

From the information below, compute the payout ratio for Kevin's Trailers. Net Income \ 200 Cash Dividends (common) 40 Retained Earnings 500 Stock Dividends (common) 10

Which of the following statements reflects the transferability of ownership rights in a corporation?

CAB Inc. has 1,000 shares of 6%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2014. What is the annual dividend on the preferred stock?

If Pratt Company issues 5,000 shares of $5 par value common stock for $210,000, the account

The return on common stockholders' equity is computed by dividing net income

Treasury shares plus outstanding shares equal

Treasury stock is a contra stockholders' equity account.

If a corporation pays taxes on its income, then stockholders will not have to pay taxes on the dividends received from that corporation.

A corporation has the following account balances: Common Stock, $1 par value, $80,000; Paid-in Capital in Excess of Par Value, $2,700,000. Based on this information, the

Three important dates associated with dividends are the: (1)___________________, (2)__________________, and (3)__________________.

All of the following statements regarding retained earnings are true except

The two ways that a corporation can be classified by ownership are

A corporation purchases 15,000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?

Dividends in arrears are liabilities of the corporation.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments and Acquisitions in Accounting

Filters

Three important dates associated with dividends are the: (1)_, (2), and (3)__.