Question 1

Stated value of no-par stock is:

Accepted Answer

A) Another name for redemption value. 
B) An amount assigned to par value stock by the state of incorporation. 
C) The market value of the stock on the date of issuance. 
D) The difference between the par value of stock and the amount below or above par value contributed by the stockholder. 
E) An amount assigned to no-par stock by the corporation's board of directors. 
A) Another name for redemption value. 
B) An amount assigned to par value stock by the state of incorporation. 
C) The market value of the stock on the date of issuance. 
D) The difference between the par value of stock and the amount below or above par value contributed by the stockholder. 
E) An amount assigned to no-par stock by the corporation's board of directors.

Question 2

Dawls Corporation reported stockholders' equity on December 31 of the prior year as follows:
   The following selected transactions occurred during the current year:
   Prepare a statement of retained earnings as of December 31 of the current year.

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 3

A newly formed company sold stock for $545,000.The shares had a par value of $5 each.After the transaction,the Paid-In Capital in Excess of Par,Common Stock,account had a balance of $215,000.How many shares did the company sell?

Accepted Answer

A) 62,000 
B) 152,000 
C) 43,000 
D) 109,000 
E) 66,000 
A) 62,000 
B) 152,000 
C) 43,000 
D) 109,000 
E) 66,000

Question 4

Shamrock Company had net income of $30,000.On January 1,there were 8,000 shares of common stock outstanding.On April 1,the company issued an additional 2,000 shares of common stock.The company declared a $2,700 dividend on its noncumulative,nonparticipating preferred stock.There were no other stock transactions.The company has an earnings per share of:

Accepted Answer

A) $2.87 
B) $2.73 
C) $3.41 
D) $3.16 
E) $3.75 
A) $2.87 
B) $2.73 
C) $3.41 
D) $3.16 
E) $3.75

Question 5

A company issued 60 shares of $100 par value stock for $7,000 cash.The total amount of contributed capital is:

Accepted Answer

A) $100 
B) $600 
C) $1,000 
D) $6,000 
E) $7,000 
A) $100 
B) $600 
C) $1,000 
D) $6,000 
E) $7,000

Question 6

Explain how to calculate the price-earnings ratio and describe how it is used in analysis of a company's financial condition and performance.

Accepted Answer

The price-earnings ratio of a common sto

Question 7

A company has 200,000 shares of $1 par value common stock and 20,000 shares of 7%,$100 par,cumulative preferred stock outstanding.The balance in Retained Earnings account at the beginning of the year was $1,500,000 and one year's dividends were in arrears.Net income for the current year was $2,000,000.If the company paid a dividend of $3 per share on its common stock,what is the balance in Retained Earnings account at the end of the year?

Accepted Answer

A) $3,500,000 
B) $2,900,000 
C) $2,760,000 
D) $2,620,000 
E) $620,000 
A) $3,500,000 
B) $2,900,000 
C) $2,760,000 
D) $2,620,000 
E) $620,000

Question 8

A company has 500 shares of $50 par value preferred stock outstanding and the call price of its preferred stock is $60 per share.It also has 20,000 shares of common stock outstanding and the total value of its stockholders' equity is $680,000.The company's book value per common share equals:

Accepted Answer

A) $31.71 
B) $32.50 
C) $32.75 
D) $33.17 
E) $60.00 
A) $31.71 
B) $32.50 
C) $32.75 
D) $33.17 
E) $60.00

Question 9

For each of the following independent transactions (a) through (d),prepare the necessary journal entry:
(a) Declared a $0.40 per share cash dividend on 200,000 shares of preferred stock outstanding.
(b) Declared and distributed a 12% stock dividend on 800,000 shares of $5 par value common stock outstanding.Market price per common share on this date was $25.
(c) Declared and distributed a 2-for-1 stock split on 500,000 shares of $10 par value common stock outstanding.
(d) Declared and distributed a 30% stock dividend on 400,000 common shares of $5 par value common stock outstanding.Market price per common share on this date was $20.

Accepted Answer

(a) @#IMG-DLM&_TB6947_00_TB6947_00_TB6947_00 (b) @#IMG-DLM&_

Question 10

A company has 500,000 common shares authorized,400,000 common shares issued,and 15,000 common shares in treasury stock at the current year-end.It paid $0.24 per share in cash dividends during the year.The year-end market price of the stock is $15.Calculate (1) the total dividends paid and (2) the dividend yield.

Accepted Answer

(1) $0.24 x (400,000

Question 11

A corporation can issue both common and preferred stock.

Accepted Answer

A) True 
 B)False

Question 12

Earnings per share is calculated by dividing the total number of common shares outstanding by net income.

Accepted Answer

A) True 
 B)False

Question 13

A company reported net income of $850,000 for the current year.The year-end market price per common share was $12 and there were 425,000 weighted-average shares of common stock outstanding.Calculate the company's price-earnings ratio.

Accepted Answer

$12/($850,

Question 14

Stocks that pay relatively large cash dividends on a regular basis are referred to as:

Accepted Answer

A) Small capital stocks 
B) Mid capital stocks 
C) Growth stocks 
D) Large capital stocks 
E) Income stocks 
A) Small capital stocks 
B) Mid capital stocks 
C) Growth stocks 
D) Large capital stocks 
E) Income stocks

Question 15

Stockholders' equity consists of:

Accepted Answer

A) Long-term assets. 
B) Contributed capital and retained earnings. 
C) Contributed capital and par value. 
D) Retained earnings and cash. 
E) Premiums and discounts. 
A) Long-term assets. 
B) Contributed capital and retained earnings. 
C) Contributed capital and par value. 
D) Retained earnings and cash. 
E) Premiums and discounts.

Question 16

Achieving an increased return on common stock by paying dividends on preferred stock at a rate that is less than the rate of return earned with the assets invested from the preferred stock issuance is called:

Accepted Answer

A) Financial leverage 
B) Discount on stock 
C) Premium on stock 
D) Preemptive right 
E) Capital gain 
A) Financial leverage 
B) Discount on stock 
C) Premium on stock 
D) Preemptive right 
E) Capital gain

Question 17

What is treasury stock? How is the purchase and sale of treasury stock recorded?

Accepted Answer

Treasury stock is the company's own issu

Question 18

A corporation has $1,750,000 in stockholders' equity and 350,000 shares of common stock outstanding.Calculate the book value per common share.

Accepted Answer

$1,750,000/350,000 s

Question 19

A corporation reported net income of $3,730,000 and paid preferred cash dividends of $100,000 during the current year.There were 600,000 shares of common stock outstanding and the market price per common share was $88.33 at year-end.Calculate the company's price-earnings ratio.

Accepted Answer

$88.33/[($3,730,000

Question 20

A company reported the following stockholders' equity on January 1 of the current year:
   Prepare journal entries for the following selected transactions related to this company's stock during the current year:

Accepted Answer

@#IMG-DLM&_TB6947_00

Stated value of no-par stock is:

Dawls Corporation reported stockholders' equity on December 31 of the prior year as follows: The following selected transactions occurred during the current year: Prepare a statement of retained earnings as of December 31 of the current year.

A newly formed company sold stock for $545,000.The shares had a par value of $5 each.After the transaction,the Paid-In Capital in Excess of Par,Common Stock,account had a balance of $215,000.How many shares did the company sell?

A company issued 60 shares of $100 par value stock for $7,000 cash.The total amount of contributed capital is:

Explain how to calculate the price-earnings ratio and describe how it is used in analysis of a company's financial condition and performance.

A company has 500 shares of $50 par value preferred stock outstanding and the call price of its preferred stock is $60 per share.It also has 20,000 shares of common stock outstanding and the total value of its stockholders' equity is $680,000.The company's book value per common share equals:

A corporation can issue both common and preferred stock.

Earnings per share is calculated by dividing the total number of common shares outstanding by net income.

A company reported net income of $850,000 for the current year.The year-end market price per common share was $12 and there were 425,000 weighted-average shares of common stock outstanding.Calculate the company's price-earnings ratio.

Stocks that pay relatively large cash dividends on a regular basis are referred to as:

Stockholders' equity consists of:

Achieving an increased return on common stock by paying dividends on preferred stock at a rate that is less than the rate of return earned with the assets invested from the preferred stock issuance is called:

What is treasury stock? How is the purchase and sale of treasury stock recorded?

A corporation has $1,750,000 in stockholders' equity and 350,000 shares of common stock outstanding.Calculate the book value per common share.

A corporation reported net income of $3,730,000 and paid preferred cash dividends of $100,000 during the current year.There were 600,000 shares of common stock outstanding and the market price per common share was $88.33 at year-end.Calculate the company's price-earnings ratio.

A company reported the following stockholders' equity on January 1 of the current year: Prepare journal entries for the following selected transactions related to this company's stock during the current year:

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 11: Reporting and Analyzing Equity

Stated value of no-par stock is:

Dawls Corporation reported stockholders' equity on December 31 of the prior year as follows: The following selected transactions occurred during the current year: Prepare a statement of retained earnings as of December 31 of the current year.

A newly formed company sold stock for $545,000.The shares had a par value of $5 each.After the transaction,the Paid-In Capital in Excess of Par,Common Stock,account had a balance of $215,000.How many shares did the company sell?

A company issued 60 shares of $100 par value stock for $7,000 cash.The total amount of contributed capital is:

Explain how to calculate the price-earnings ratio and describe how it is used in analysis of a company's financial condition and performance.

A company has 500 shares of $50 par value preferred stock outstanding and the call price of its preferred stock is $60 per share.It also has 20,000 shares of common stock outstanding and the total value of its stockholders' equity is $680,000.The company's book value per common share equals:

A corporation can issue both common and preferred stock.

Earnings per share is calculated by dividing the total number of common shares outstanding by net income.

A company reported net income of $850,000 for the current year.The year-end market price per common share was $12 and there were 425,000 weighted-average shares of common stock outstanding.Calculate the company's price-earnings ratio.

Stocks that pay relatively large cash dividends on a regular basis are referred to as:

Stockholders' equity consists of:

Achieving an increased return on common stock by paying dividends on preferred stock at a rate that is less than the rate of return earned with the assets invested from the preferred stock issuance is called:

What is treasury stock? How is the purchase and sale of treasury stock recorded?

A corporation has $1,750,000 in stockholders' equity and 350,000 shares of common stock outstanding.Calculate the book value per common share.

A corporation reported net income of $3,730,000 and paid preferred cash dividends of $100,000 during the current year.There were 600,000 shares of common stock outstanding and the market price per common share was $88.33 at year-end.Calculate the company's price-earnings ratio.

A company reported the following stockholders' equity on January 1 of the current year: Prepare journal entries for the following selected transactions related to this company's stock during the current year:

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters