Question 1

A liability arises when the board of directors declares a stock dividend.

Accepted Answer

A) True 
 B)False

Question 2

Sizemore, Inc. has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2014. If the board of directors declares a $30,000 dividend, the

Accepted Answer

A)  preferred stockholders will receive 1/10th of what the common stockholders will receive. 
B)  preferred stockholders will receive the entire $30,000. 
C)  $30,000 will be held as restricted retained earnings and paid out at some future date. 
D)  preferred stockholders will receive $15,000 and the common stockholders will receive $15,000. 
A)  preferred stockholders will receive 1/10th of what the common stockholders will receive. 
B)  preferred stockholders will receive the entire $30,000. 
C)  $30,000 will be held as restricted retained earnings and paid out at some future date. 
D)  preferred stockholders will receive $15,000 and the common stockholders will receive $15,000.

Question 3

Identify the effect the declaration of a stock dividend has on the par value per share and book value per share.

Accepted Answer

The answer of Identify the effect the declaration of a...

Question 4

If the board of directors authorizes a $100,000 restriction of retained earnings for a future plant expansion, the effect of this action is to

Accepted Answer

A)  decrease total assets and total stockholders' equity. 
B)  increase stockholders' equity and to decrease total liabilities. 
C)  decrease total retained earnings and increase total liabilities. 
D)  reduce the amount of retained earnings available for dividend declarations. 
A)  decrease total assets and total stockholders' equity. 
B)  increase stockholders' equity and to decrease total liabilities. 
C)  decrease total retained earnings and increase total liabilities. 
D)  reduce the amount of retained earnings available for dividend declarations.

Question 5

On November 1, 2014, Kalen Corporation's stockholders' equity section is as follows:   On November 1, Kalen declares and distributes a 15% stock dividend when the market value of the stock is $16 per share.
Instructions
Indicate the balances in the stockholders' equity accounts after the stock dividend has been distributed.

Accepted Answer

The answer of On November 1, 2014, Kalen Corporation's stockholders'...

Question 6

The chief accounting officer in a company is known as the

Accepted Answer

A)  controller. 
B)  treasurer. 
C)  vice-president. 
D)  president. 
A)  controller. 
B)  treasurer. 
C)  vice-president. 
D)  president.

Question 7

All of the following statements about preferred stock are true except

Accepted Answer

A)  preferred stock will have a paid-in capital account that is separate from other stock. 
B)  preferred stock is presented first on the stockholder's equity section. 
C)  preferred stock can be either par value or no-par value. 
D)  there can be only one class of preferred stock. 
A)  preferred stock will have a paid-in capital account that is separate from other stock. 
B)  preferred stock is presented first on the stockholder's equity section. 
C)  preferred stock can be either par value or no-par value. 
D)  there can be only one class of preferred stock.

Question 8

Manning Company has $1,000,000 in assets and $1,000,000 in stockholders' equity, with 50,000 shares outstanding the entire year. It has a return on assets ratio of 9%. In the past year it had net income of $75,000. On January 1, 2014, it issued $300,000 in debt at 5% and immediately repurchased 25,000 shares for $300,000. Management expected that, had it not issued the debt, it would have again had net income of $75,000.
Instructions
(a) Determine the Company's net income and earnings per share for 2013 and 2014. (Ignore taxes in your computations.)
(b) Compute the Company's return on common stockholders' equity for 2013 and 2014.
(c) Compute the company's debt to assets ratio for 2013 and 2014.

Accepted Answer

The answer of Manning Company has $1,000,000 in assets and...

Question 9

Logan Corporation issues 50,000 shares of $50 par value preferred stock for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $3,000,000 and a credit or credits to

Accepted Answer

A)  Preferred Stock for $3,000,000. 
B)  Preferred Stock for $2,500,000 and Paid-in Capital in Excess of Par Value-Preferred Stock for $500,000. 
C)  Preferred Stock for $2,500,000 and Retained Earnings for $500,000. 
D)  Paid-in Capital from Preferred Stock for $3,000,000. 
A)  Preferred Stock for $3,000,000. 
B)  Preferred Stock for $2,500,000 and Paid-in Capital in Excess of Par Value-Preferred Stock for $500,000. 
C)  Preferred Stock for $2,500,000 and Retained Earnings for $500,000. 
D)  Paid-in Capital from Preferred Stock for $3,000,000.

Question 10

Watson, Inc. has 10,000 shares of 6%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2014. There were no dividends declared in 2012. The board of directors declares and pays a $100,000 dividend in 2013 and in 2014. What is the amount of dividends received by the common stockholders in 2014?

Accepted Answer

A)  $20,000. 
B)  $60,000. 
C)  $100,000. 
D)  $0. 
A)  $20,000. 
B)  $60,000. 
C)  $100,000. 
D)  $0.

Question 11

Racer Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative,   Racer's total paid-in capital was

Accepted Answer

A)  $62,480,000. 
B)  $63,320,000. 
C)  $61,640,000. 
D)  $36,080,000. 
A)  $62,480,000. 
B)  $63,320,000. 
C)  $61,640,000. 
D)  $36,080,000.

Question 12

A corporation purchases 20,000 shares of its own $10 par common stock for $25 per share, recording it at cost. What will be the effect on total stockholders' equity?

Accepted Answer

A)  Increase by $200,000. 
B)  Decrease by $500,000. 
C)  Increase by $500,000. 
D)  Decrease by $200,000. 
A)  Increase by $200,000. 
B)  Decrease by $500,000. 
C)  Increase by $500,000. 
D)  Decrease by $200,000.

Question 13

Dividends in arrears are liabilities of the corporation.

Accepted Answer

A) True 
 B)False

Question 14

What is the total stockholders' equity based on the following account balances?

Accepted Answer

A)  $1,000,000. 
B)  $975,000. 
C)  $950,000. 
D)  $800,000. 
A)  $1,000,000. 
B)  $975,000. 
C)  $950,000. 
D)  $800,000.

Question 15

The following are selected accounts and balances from the records of Doran Corporation on June 30, 2014.   Instructions
Prepare in proper form the stockholders' equity section of the balance sheet.

Accepted Answer

The answer of The following are selected accounts and balances...

Question 16

If no-par stock is issued without a stated value, then

Accepted Answer

A)  the par value is automatically $1 per share. 
B)  the entire proceeds are considered to be legal capital. 
C)  there is no legal capital. 
D)  the corporation is automatically in violation of its state charter. 
A)  the par value is automatically $1 per share. 
B)  the entire proceeds are considered to be legal capital. 
C)  there is no legal capital. 
D)  the corporation is automatically in violation of its state charter.

Question 17

The sale of shares in a corporation by one stockholder to another affects the total capital of the corporation.

Accepted Answer

A) True 
 B)False

Question 18

A corporation is not an entity that is separate and distinct from its owners.

Accepted Answer

A) True 
 B)False

Question 19

A corporate board of directors does not generally

Accepted Answer

A)  select officers. 
B)  formulate operating policies. 
C)  declare dividends. 
D)  execute policy. 
A)  select officers. 
B)  formulate operating policies. 
C)  declare dividends. 
D)  execute policy.

Question 20

The board of directors must assign a per share value to a stock dividend declared that is

Accepted Answer

A)  greater than the par or stated value. 
B)  less than the par or stated value. 
C)  equal to the par or stated value. 
D)  at least equal to the par or stated value. 
A)  greater than the par or stated value. 
B)  less than the par or stated value. 
C)  equal to the par or stated value. 
D)  at least equal to the par or stated value.

A liability arises when the board of directors declares a stock dividend.

Sizemore, Inc. has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2014. If the board of directors declares a $30,000 dividend, the

Identify the effect the declaration of a stock dividend has on the par value per share and book value per share.

If the board of directors authorizes a $100,000 restriction of retained earnings for a future plant expansion, the effect of this action is to

The chief accounting officer in a company is known as the

All of the following statements about preferred stock are true except

Logan Corporation issues 50,000 shares of $50 par value preferred stock for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $3,000,000 and a credit or credits to

Racer Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, Racer's total paid-in capital was

A corporation purchases 20,000 shares of its own $10 par common stock for $25 per share, recording it at cost. What will be the effect on total stockholders' equity?

Dividends in arrears are liabilities of the corporation.

What is the total stockholders' equity based on the following account balances?

The following are selected accounts and balances from the records of Doran Corporation on June 30, 2014. Instructions Prepare in proper form the stockholders' equity section of the balance sheet.

If no-par stock is issued without a stated value, then

The sale of shares in a corporation by one stockholder to another affects the total capital of the corporation.

A corporation is not an entity that is separate and distinct from its owners.

A corporate board of directors does not generally

The board of directors must assign a per share value to a stock dividend declared that is

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

Time Value of Money

Filters

Exam 11: Reporting and Analyzing Stockholders Equity

A liability arises when the board of directors declares a stock dividend.

Sizemore, Inc. has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2014. If the board of directors declares a $30,000 dividend, the

Identify the effect the declaration of a stock dividend has on the par value per share and book value per share.

If the board of directors authorizes a $100,000 restriction of retained earnings for a future plant expansion, the effect of this action is to

The chief accounting officer in a company is known as the

All of the following statements about preferred stock are true except

Logan Corporation issues 50,000 shares of $50 par value preferred stock for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $3,000,000 and a credit or credits to

Racer Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, Racer's total paid-in capital was

A corporation purchases 20,000 shares of its own $10 par common stock for $25 per share, recording it at cost. What will be the effect on total stockholders' equity?

Dividends in arrears are liabilities of the corporation.

What is the total stockholders' equity based on the following account balances?

The following are selected accounts and balances from the records of Doran Corporation on June 30, 2014. Instructions Prepare in proper form the stockholders' equity section of the balance sheet.

If no-par stock is issued without a stated value, then

The sale of shares in a corporation by one stockholder to another affects the total capital of the corporation.

A corporation is not an entity that is separate and distinct from its owners.

A corporate board of directors does not generally

The board of directors must assign a per share value to a stock dividend declared that is

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

Time Value of Money

Filters