Exam 11: Reporting and Interpreting Stockholders Equity
Exam 1: Business Decisions and Financial Accounting211 Questions
Exam 2: Reporting Investing and Financing Results on the Balance Sheet193 Questions
Exam 3: Reporting Operating Results on the Income Statement235 Questions
Exam 4: Adjustments,financial Statements,and Financial Results246 Questions
Exam 5: Fraud, Internal Control, and Cash188 Questions
Exam 6: Internal Control and Financial Reporting for Cash and Merchandising Operations210 Questions
Exam 7: Reporting and Interpreting Inventories and Cost of Goods Sold214 Questions
Exam 8: Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue230 Questions
Exam 9: Reporting and Interpreting Long-Lived Tangible and Intangible Assets266 Questions
Exam 10: Reporting and Interpreting Liabilities235 Questions
Exam 11: Reporting and Interpreting Stockholders Equity253 Questions
Exam 12: Reporting and Interpreting the Statement of Cash Flows208 Questions
Exam 13: Measuring and Evaluating Financial Performance170 Questions
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Groucho,Harpo,and Chico go into partnership on January 1,2015.Groucho contributes $90,000,Harpo $70,000,and Chico $40,000 to a business called Marx Brothers' Partnership.On a monthly basis,each partner is allocated income and is allowed to receive cash from the business in proportion to the capital they provided.Assume that Groucho receives $2,700 cash per month.
Required:
Part a.Prepare the journal entry for the initial investment.
Part b.Determine the monthly distribution amounts for each of the three partners.
Part c.Prepare the journal entry that would be made in one month for the monthly distribution.
Part d.Prepare the journal entry for the allocation of an annual net income of $84,000.For purposes of this journal entry,assume Sales Revenue totaled $116,000 and that all expenses,totaling $32,000,were recorded in a single account called Operating Expenses.
Part e.Prepare the journal entry to close the Drawings accounts at the end of the year.
Part f.Prepare a Statement of Partners' Equity (assume no additional investments made).
(Essay)
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Which of the following statements would not explain why a company may want to repurchase its stock?
(Multiple Choice)
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The number of shares outstanding equals the number of shares:
(Multiple Choice)
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Use the information above to answer the following question.What was the amount of Retained Earnings reported in the balance sheet on December 31,2010?
(Multiple Choice)
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You form a partnership with your best friend.You have contributed 65% of the capital and can claim 65% of the net income.At the end of the first year,you discover that your partner has run up $40,000 in debt using the business' credit card.The maximum you could be liable for is:
(Multiple Choice)
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Delta Inc.had 1,000,000 shares of $4 par value common stock authorized.On December 31,2015,there were 400,000 shares issued and outstanding.The market value of its common stock on that date was $100 per share.On January 5,2016,the board of directors declared a stock dividend.
Required:
Part a.Assume that you have 100 shares of Delta Inc.common stock.Determine how many shares will you have after a 100% stock dividend.
Part b.Briefly explain the how a 100% stock dividend affects the stockholders' equity accounts and the total resources of the company.(Do not quantify the impacts or prepare a journal entry.)
Part c.Assume instead that the board declared a 10% stock dividend.Briefly explain how that 10% stock dividend affects the stockholders' equity accounts and the total resources of the company.(Do not quantify the impacts or prepare a journal entry.)
Part d.Identify three possible explanations for the declaration of a stock dividend.
(Essay)
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Treasure This,Inc.had total assets of $100,000,total liabilities of $60,000 and stockholders' equity of $40,000 before repurchasing 1,000 shares of its $1 par value common stock for $5 per share.After this repurchase,total assets equal _____,total liabilities equal ______ and stockholders' equity equals ______:
(Multiple Choice)
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A corporation does not have a legal obligation to pay dividends.
(True/False)
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With regards to the Dividends Payable and Dividends accounts,one of the closing entries required at year end,includes a:
(Multiple Choice)
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A corporate charter specifies that the company may issue up to 20 million shares of stock.The company sells 12 million shares to investors and later buys back 3 million shares.The current number of shares of treasury stock after these transactions have been accounted for is:
(Multiple Choice)
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Hopkins,Inc.has 1,000 shares of common stock and 1,000 shares of preferred stock outstanding.The preferred stock has a cumulative dividend preference.Both classes of stock have a par value of $10.The preferred stock has a dividend rate of 6 percent.Hopkins failed to pay a dividend during the prior year.During the current year,the board of directors declares dividends totaling $2,000.Accordingly,the company will distribute dividends in the amount of:
(Multiple Choice)
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Advantages of equity financing over debt financing include that:
(Multiple Choice)
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A major advantage of debt financing is that interest expense is tax deductible.
(True/False)
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Double Vision,Inc.had 10,000 shares issued and outstanding of its $1 par value common stock.At December 31,Common Stock equaled $10,000,Retained Earnings equaled $20,000 and Total stockholders' equity equaled $50,000 prior to a 2-for-1 stock split.As a result of a 2-for-1 stock split:
(Multiple Choice)
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Typically,a profitable company that pays relatively high dividends:
(Multiple Choice)
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