Question 1

What is the formula for the payout ratio? What does it indicate?

Accepted Answer

The payout ratio is computed by dividing

Question 2

Miles Co. had these transactions during the current period. June $\quad$12 $\quad$Issued 50,000 shares of $\$ 3$ stated value common stock for cash of $\$ 250,000$.
July $\quad$11$\quad$ Issued 2,000 shares of $\$ 100$ par value preferred stock for cash at $\$ 108$ per share.
Nov. $\quad$28$\quad$ Purchased 2,000 shares of treasury stock for $\$ 10,000$.
 Instructions
Prepare the journal entries for the preceding transactions.

Accepted Answer

The answer of Miles Co. had these transactions during the...

Question 3

Which of the following statements is not true about a 2-for-1 stock split?

Accepted Answer

A)  The market value of the stock will probably decrease. 
B)  A stockholder with 5 shares before the split owns 10 shares after the split. 
C)  Par value per share is reduced to half of what it was before the split. 
D)  Total paid-in capital increases. 
A)  The market value of the stock will probably decrease. 
B)  A stockholder with 5 shares before the split owns 10 shares after the split. 
C)  Par value per share is reduced to half of what it was before the split. 
D)  Total paid-in capital increases.

Question 4

The net effects on the corporation of the declaration and payment of a cash dividend are to

Accepted Answer

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

Question 5

Why must a corporation have sufficient retained earnings before it may declare cash dividends?

Accepted Answer

By definition a dividend is the distribu

Question 6

The acquisition of treasury stock by a corporation

Accepted Answer

A)  increases its total assets and total stockholders' equity. 
B)  decreases its total assets and total stockholders' equity. 
C)  has no effect on total assets and total stockholders' equity. 
D)  requires that a gain or loss be recognized on the income statement. 
A)  increases its total assets and total stockholders' equity. 
B)  decreases its total assets and total stockholders' equity. 
C)  has no effect on total assets and total stockholders' equity. 
D)  requires that a gain or loss be recognized on the income statement.

Question 7

Dawson Company issued 600 shares of no-par common stock for $5,400. Which of the following journal entries would be made if the stock has stated value of $2 per share?

Accepted Answer

The answer of Dawson Company issued 600 shares of no-par...

Question 8

Treasury stock should not be classified as a current asset.

Accepted Answer

A) True 
 B)False

Question 9

Leary Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000. As a result of this event,

Accepted Answer

A)  Leary's Common Stock account decreased $50,000. 
B)  Leary's total stockholders' equity decreased $115,000. 
C)  Leary's Paid-in Capital in Excess of Par Value account decreased $65,000. 
D)  All of these answer choices are correct. 
A)  Leary's Common Stock account decreased $50,000. 
B)  Leary's total stockholders' equity decreased $115,000. 
C)  Leary's Paid-in Capital in Excess of Par Value account decreased $65,000. 
D)  All of these answer choices are correct.

Question 10

Dividends are predominantly paid in

Accepted Answer

A)  scrip. 
B)  property. 
C)  cash. 
D)  stock. 
A)  scrip. 
B)  property. 
C)  cash. 
D)  stock.

Question 11

Listed below are items typically found in the stockholders' equity section of the balance sheet.
Common stock, $10 stated value
Retained earnings
8% Preferred stock, $100 par value
Paid-in capital in excess of par value-Preferred Stock
Paid-in capital in excess of stated value-Common Stock
Treasury stock

Stockholders' equity
Paid-in capital
Capital stock
Additional paid-in capital
Total additional paid-in capital
Total paid-in capital
Retained earnings
Total paid-in capital and retained earnings
Total stockholders' equity
Instructions
Place each of the items listed below in the appropriate subdivision of the stockholders' equity section of a balance sheet.

Accepted Answer

Stockholders' equity
Paid-in capital
Cap

Question 12

On January 1, Swanson Corporation had 80,000 ordinary shares with a €10 par value outstanding. On March 17, the company declared a 15% share dividend to shareholders of record on March 20. Market value of the shares was €13 on March 17. The entry to record the transaction of March 17 would include a

Accepted Answer

A)  credit to Cash Dividends for €36,000. 
B)  credit to Cash for €156,000. 
C)  credit to Ordinary Share Dividends Distributable for €120,000. 
D)  debit to Ordinary Share Dividends Distributable for €120,000. 
A)  credit to Cash Dividends for €36,000. 
B)  credit to Cash for €156,000. 
C)  credit to Ordinary Share Dividends Distributable for €120,000. 
D)  debit to Ordinary Share Dividends Distributable for €120,000.

Question 13

A 10% stock dividend will increase the number of shares outstanding but the book value per share will decrease.

Accepted Answer

A) True 
 B)False

Question 14

Johnson Company issued 900 shares of no-par common stock for $15,300. Which of the following journal entries would be made if the stock has no stated value?

Accepted Answer

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

Question 15

On January 1, Edmiston Corporation had 1,600,000 shares of $10 par value common stock outstanding. On March 31 the company declared a 10% stock dividend. Market value of the stock was $15/share. As a result of this event,

Accepted Answer

A)  Edmiston's Paid-in Capital in Excess of Par Value account increased $800,000. 
B)  Edmiston's total stockholders' equity was unaffected. 
C)  Edmiston's Stock Dividends account increased $2,400,000. 
D)  All of these answer choices are correct. 
A)  Edmiston's Paid-in Capital in Excess of Par Value account increased $800,000. 
B)  Edmiston's total stockholders' equity was unaffected. 
C)  Edmiston's Stock Dividends account increased $2,400,000. 
D)  All of these answer choices are correct.

Question 16

If Norben Company issues 4,000 shares of $5 par value common stock for $140,000, the account

Accepted Answer

A)  Common Stock will be credited for $140,000. 
B)  Paid-in Capital in Excess of Par Value will be credited for $20,000. 
C)  Paid-in Capital in Excess of Par Value will be credited for $120,000. 
D)  Cash will be debited for $120,000. 
A)  Common Stock will be credited for $140,000. 
B)  Paid-in Capital in Excess of Par Value will be credited for $20,000. 
C)  Paid-in Capital in Excess of Par Value will be credited for $120,000. 
D)  Cash will be debited for $120,000.

Question 17

Alt Corp. issues 3,000 shares of $10 par value common stock at $14 per share. When the transaction is recorded, credits are made to:

Accepted Answer

A)  Common Stock $30,000 and Paid-in Capital in Excess of Stated Value $12,000. 
B)  Common Stock $28,000. 
C)  Common Stock $30,000 and Paid-in Capital in Excess of Par Value $12,000. 
D)  Common Stock $30,000 and Retained Earnings $12,000. 
A)  Common Stock $30,000 and Paid-in Capital in Excess of Stated Value $12,000. 
B)  Common Stock $28,000. 
C)  Common Stock $30,000 and Paid-in Capital in Excess of Par Value $12,000. 
D)  Common Stock $30,000 and Retained Earnings $12,000.

What is the formula for the payout ratio? What does it indicate?

Which of the following statements is not true about a 2-for-1 stock split?

The net effects on the corporation of the declaration and payment of a cash dividend are to

Why must a corporation have sufficient retained earnings before it may declare cash dividends?

The acquisition of treasury stock by a corporation

Dawson Company issued 600 shares of no-par common stock for $5,400. Which of the following journal entries would be made if the stock has stated value of $2 per share?

Treasury stock should not be classified as a current asset.

Leary Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000. As a result of this event,

Dividends are predominantly paid in

A 10% stock dividend will increase the number of shares outstanding but the book value per share will decrease.

Johnson Company issued 900 shares of no-par common stock for $15,300. Which of the following journal entries would be made if the stock has no stated value?

On January 1, Edmiston Corporation had 1,600,000 shares of $10 par value common stock outstanding. On March 31 the company declared a 10% stock dividend. Market value of the stock was $15/share. As a result of this event,

If Norben Company issues 4,000 shares of $5 par value common stock for $140,000, the account

Alt Corp. issues 3,000 shares of $10 par value common stock at $14 per share. When the transaction is recorded, credits are made to:

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

What is the formula for the payout ratio? What does it indicate?

Which of the following statements is not true about a 2-for-1 stock split?

The net effects on the corporation of the declaration and payment of a cash dividend are to

Why must a corporation have sufficient retained earnings before it may declare cash dividends?

The acquisition of treasury stock by a corporation

Dawson Company issued 600 shares of no-par common stock for $5,400. Which of the following journal entries would be made if the stock has stated value of $2 per share?

Treasury stock should not be classified as a current asset.

Leary Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000. As a result of this event,

Dividends are predominantly paid in

A 10% stock dividend will increase the number of shares outstanding but the book value per share will decrease.

Johnson Company issued 900 shares of no-par common stock for $15,300. Which of the following journal entries would be made if the stock has no stated value?

On January 1, Edmiston Corporation had 1,600,000 shares of $10 par value common stock outstanding. On March 31 the company declared a 10% stock dividend. Market value of the stock was $15/share. As a result of this event,

If Norben Company issues 4,000 shares of $5 par value common stock for $140,000, the account

Alt Corp. issues 3,000 shares of $10 par value common stock at $14 per share. When the transaction is recorded, credits are made to:

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