Exam 11: Reporting and Interpreting Stockholders Equity

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Par value of a stock refers to the:

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State laws often restrict dividends to the amount of Retained Earnings.

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Advantages of debt financing over equity financing are that:

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Which of the following statements about dividends is not correct?

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A company reported net income of $6 million.During the year the average number of common shares outstanding was 3 million.The price of a share of common stock at the end of the year was $5.There were 400,000 shares of preferred stock outstanding on average and no dividends were declared and the preferred stock is noncumulative. -Use the information above to answer the following question.The Price/Earnings ratio is approximately:

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All of the following are a part of contributed capital except:

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A company issues 1 million shares of preferred stock with a par value of $2 at its market price of $26 per share.The issuance should be recorded with a debit to Cash for:

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Which of the following statements about the par value of common stock is not correct?

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Equity and debt financing both have their advantages and disadvantages.Which of the following pairs of phrases below accurately reflect the advantages of both types of financing? Equity and debt financing both have their advantages and disadvantages.Which of the following pairs of phrases below accurately reflect the advantages of both types of financing?

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Why is Additional Paid-In Capital recorded for a small stock dividend?

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Which of the following would be the best investment?

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A company that pays no dividends is always a poor investment.

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The following information is available from the accounting records of the First Corporation: The following information is available from the accounting records of the First Corporation:   What is the amount of stockholders' equity for First Corporation? What is the amount of stockholders' equity for First Corporation?

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The information below was extracted from the most recent financial statements of Milton Technologies (in millions, except for stock price): The information below was extracted from the most recent financial statements of Milton Technologies (in millions, except for stock price):    -Use the information above to answer the following question.What is the P/E ratio for the company's stock for the current year? -Use the information above to answer the following question.What is the P/E ratio for the company's stock for the current year?

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Jackson and O'Neill form a partnership that produces gates.Jackson provides $30,000 of capital while O'Neill contributes $90,000 of capital; they agree to split net income by the same proportion.The partnership's net income is $80,000 for the first year.They did not draw any income out of the business or add any additional capital during the first year.At the end of the year,the partners' equity is:

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At what governmental level are corporate charters issued?

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Which of the following is not a characteristic of corporate ownership?

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If Squid Roe Company's P/E ratio is 12,which of the following statements is correct?

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One reason why a company may choose a stock split over a stock dividend is that the stock split does not reduce Retained Earnings.

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Dividends Payable is recorded as a credit on the:

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