Question 1

Companies report prior period adjustments,net of any income tax effects in the:

Accepted Answer

A)  Statement of cash flows.
B)  Balance sheet.
C)  Statement of retained earnings.
D)  Income statement.
E)  No disclosure is required.F) B) and D)
G) B) and C)

Question 2

Book value per common share is computed by:

Accepted Answer

A)  Multiplying the number of common shares outstanding times the market price per common share.
B)  Dividing total assets by the number of shares outstanding.
C)  Dividing stockholders' equity applicable to common shares by the number of common shares outstanding.
D)  Multiplying the number of common shares outstanding by par value per share.
E)  Dividing the number of common shares outstanding by stockholders' equity applicable to common shares.F) B) and D)
G) A) and D)

Question 3

Corporations issue preferred stock to raise capital without sacrificing control of the corporation and/or to boost the return earned by common shareholders.

Accepted Answer

A) True 
 B)False

Question 4

A company has earnings per share of $9.60.Its dividend per share is $0.50,its market price per share is $110,and its book value per share is $96.Its price-earnings ratio equals:

Accepted Answer

A)  1.15.
B)  0.87.
C)  19.2.
D)  10.0.
E)  11.46.F) A) and B)
G) A) and C)

Question 5

Fetzer Company declared a $0.55 per share cash dividend.The company has 200,000 shares authorized,190,000 shares issued,and 8,000 shares in treasury stock.The journal entry to record the dividend declaration is:

Accepted Answer

A)  Debit Retained Earnings $104,500; credit Common Dividends Payable $104,500.
B)  Debit Common Dividends Payable $104,500; credit Cash $104,500.
C)  Debit Retained Earnings $100,100; credit Common Dividends Payable $100,100.
D)  Debit Common Dividends Payable $100,100; credit Cash $100,100.
E)  Debit Retained Earnings $110,000; credit Common Dividends Payable $110,000.F) B) and D)
G) B) and C)

Question 6

Earnings per share is the amount of income earned per share of a company's outstanding (weighted-average)common stock.

Accepted Answer

A) True 
 B)False

Question 7

The price-earnings ratio is computed by dividing earnings per share by the market price per share.

Accepted Answer

A) True 
 B)False

Question 8

A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding.The journal entry to record the payment of the cash dividend is:

Accepted Answer

A)  Debit Dividend Expense $12,000; credit Cash $12,000.
B)  Debit Dividend Expense $12,000; credit Common Dividend Payable $12,000.
C)  Debit Common Dividend Payable $12,000; credit Cash $12,000.
D)  Debit Retained Earnings $12,000; credit Common Dividend Payable $12,000.
E)  Debit Common Dividend Payable $12,000; credit Retained Earnings $12,000.F) None of the above
G) A) and E)

Question 9

Preferred stock which confers rights to prior periods' unpaid dividends even if they were not declared is called:

Accepted Answer

A)  Noncumulative preferred stock.
B)  Participating preferred stock.
C)  Callable preferred stock.
D)  Cumulative preferred stock.
E)  Convertible preferred stock.F) A) and B)
G) A) and C)

Question 10

Stock that was reacquired and is still held by the issuing corporation is called:

Accepted Answer

A)  Capital stock.
B)  Treasury stock.
C)  Redeemed stock.
D)  Preferred stock.
E)  Callable stock.F) A) and D)
G) A) and C)

Question 11

A company issued 70 shares of $30 par value preferred stock for $4,000 cash.The journal entry to record the issuance is:

Accepted Answer

A)  Debit Cash $2,100; credit Preferred Stock $2,100.
B)  Debit Investment in Preferred Stock $2,100; credit Cash $2,100.
C)  Debit Cash $4,000; credit Preferred Stock $4,000.
D)  Debit Preferred Stock $2,100,debit Investment in Preferred Stock $1,900; credit Cash $4,000.
E)  Debit Cash $4,000; credit Paid-in Capital in Excess of Par Value,Preferred Stock $1,900,credit Preferred Stock $2,100.F) A) and C)
G) C) and E)

Question 12

A stock dividend is recorded with a transfer from:

Accepted Answer

A)  Contributed capital to retained earnings.
B)  Retained earnings to paid-in capital.
C)  Retained earnings to assets.
D)  Contributed capital to assets.
E)  Assets to contributed capital.F) B) and C)
G) None of the above

Question 13

Hutter Corporation declared a $0.50 per share cash dividend on its common shares.The company has 20,000 shares authorized,9,000 shares issued,and 8,000 shares of common stock outstanding.The journal entry to record the dividend declaration is:

Accepted Answer

A)  Debit Retained Earnings $4,000; credit Common Dividends Payable $4,000.
B)  Debit Common Dividends Payable $4,000; credit Cash $4,000.
C)  Debit Retained Earnings $4,500; credit Common Dividends Payable $4,500.
D)  Debit Common Dividends Payable $4,500; credit Cash $4,500.
E)  Debit Retained Earnings $10,000; credit Common Dividends Payable $10,000.F) C) and E)
G) A) and B)

Question 14

Changes in retained earnings are commonly reported in the:

Accepted Answer

A)  Statement of cash flows.
B)  Balance sheet.
C)  Statement of stockholders' equity.
D)  Multiple-step income statement.
E)  Single-step income statement.F) A) and E)
G) A) and D)

Question 15

A stock dividend decreases the market price of the company's stock.

Accepted Answer

A) True 
 B)False

Question 16

A proxy is:

Accepted Answer

A)  A document that delegates a stockholder's voting rights to an agent.
B)  A contractual commitment by an investor to purchase unissued shares of stock.
C)  An amount of assets defined by state law that stockholders must invest and leave invested in a corporation.
D)  The right of common stockholders to protect their proportionate interests in a corporation by having the first opportunity to purchase additional shares of common stock issued by the corporation.
E)  An arbitrary amount assigned to no-par stock by the corporation's board of directors.F) B) and E)
G) B) and C)

Question 17

Stock is attractive to investors because stockholders are not liable for the corporation's actions and debts and because stock is easily transferred.

Accepted Answer

A) True 
 B)False

Question 18

Prior to June 30,a company has never had any treasury stock transactions.A company repurchased 100 shares of its $1 par common stock on June 30 for $40 per share.On July 20,it reissued 50 of these shares at $46 per share.On August 1,it reissued 20 of the shares at $38 per share.What is the journal entry necessary to record the reissuance of treasury stock on July 20?

Accepted Answer

A)  Debit Common Stock $2,300; credit Cash $2,300.
B)  Debit Common Stock $20; debit Treasury Stock $2,290; credit Cash $2,300.
C)  Debit Common Stock $2,300; credit Treasury Stock $2,000; credit Paid-In Capital,Treasury Stock $300.
D)  Debit Cash $2,300; credit Paid-in Capital,Treasury Stock $300; credit Treasury Stock $2,000.
E)  Debit Cash $2,300; credit Treasury Stock $2,300.F) A) and C)
G) A) and B)

Question 19

Par value of a stock refers to the:

Accepted Answer

A)  Issue price of the stock.
B)  Value assigned per share by the corporate charter.
C)  Market value of the stock on the date of the financial statements.
D)  Maximum selling price of the stock.
E)  Dividend value of the stock.F) B) and C)
G) A) and B)

Question 20

A company paid a cash dividend of $0.88 per share during the current year,and reported 18,000 shares of common stock issued,and 2,000 common shares in treasury stock during the current year.The year-end market price per share was $27.50.Calculate the following: (1)total amount of cash dividends paid to common shareholders,and (2)dividend yield.

Accepted Answer

(1)$0.88 * (18,000 shares − 2,...

Exam 11: Reporting and Analyzing Equity

A stock dividend is recorded with a transfer from:

Correct Answer
verified

Hutter Corporation declared a $0.50 per share cash dividend on its common shares.The company has 20,000 shares authorized,9,000 shares issued,and 8,000 shares of common stock outstanding.The journal entry to record the dividend declaration is:

Correct Answer
verified

Earnings per share is the amount of income earned per share of a company's outstanding (weighted-average)common stock.

Correct Answer
verified

Changes in retained earnings are commonly reported in the:

Correct Answer
verified

A proxy is:

Correct Answer
verified

Book value per common share is computed by:

Correct Answer
verified

The price-earnings ratio is computed by dividing earnings per share by the market price per share.

Correct Answer
verified

Correct Answer
verified

Corporations issue preferred stock to raise capital without sacrificing control of the corporation and/or to boost the return earned by common shareholders.

Correct Answer
verified

Correct Answer
verified
(1)$0.88 * (18,000 shares − 2,...
View Answer

Stock that was reacquired and is still held by the issuing corporation is called:

Correct Answer
verified

A company issued 70 shares of $30 par value preferred stock for $4,000 cash.The journal entry to record the issuance is:

Correct Answer
verified

A stock dividend decreases the market price of the company's stock.

Correct Answer
verified

A company has earnings per share of $9.60.Its dividend per share is $0.50,its market price per share is $110,and its book value per share is $96.Its price-earnings ratio equals:

Correct Answer
verified

Par value of a stock refers to the:

Correct Answer
verified

Stock is attractive to investors because stockholders are not liable for the corporation's actions and debts and because stock is easily transferred.

Correct Answer
verified

Preferred stock which confers rights to prior periods' unpaid dividends even if they were not declared is called:

Correct Answer
verified

A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding.The journal entry to record the payment of the cash dividend is:

Correct Answer
verified

Companies report prior period adjustments,net of any income tax effects in the:

Correct Answer
verified

Fetzer Company declared a $0.55 per share cash dividend.The company has 200,000 shares authorized,190,000 shares issued,and 8,000 shares in treasury stock.The journal entry to record the dividend declaration is:

Correct Answer
verified

Exam 11: Reporting and Analyzing Equity

A stock dividend is recorded with a transfer from:

Correct AnswerverifiedShow Answer

Hutter Corporation declared a $0.50 per share cash dividend on its common shares.The company has 20,000 shares authorized,9,000 shares issued,and 8,000 shares of common stock outstanding.The journal entry to record the dividend declaration is:

Correct AnswerverifiedShow Answer

Earnings per share is the amount of income earned per share of a company's outstanding (weighted-average)common stock.

Correct AnswerverifiedShow Answer

Changes in retained earnings are commonly reported in the:

Correct AnswerverifiedShow Answer

A proxy is:

Correct AnswerverifiedShow Answer

Book value per common share is computed by:

Correct AnswerverifiedShow Answer

The price-earnings ratio is computed by dividing earnings per share by the market price per share.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Corporations issue preferred stock to raise capital without sacrificing control of the corporation and/or to boost the return earned by common shareholders.

Correct AnswerverifiedShow Answer

Correct Answerverified(1)$0.88 * (18,000 shares − 2,...View AnswerShow Answer

Stock that was reacquired and is still held by the issuing corporation is called:

Correct AnswerverifiedShow Answer

A company issued 70 shares of $30 par value preferred stock for $4,000 cash.The journal entry to record the issuance is:

Correct AnswerverifiedShow Answer

A stock dividend decreases the market price of the company's stock.

Correct AnswerverifiedShow Answer

A company has earnings per share of $9.60.Its dividend per share is $0.50,its market price per share is $110,and its book value per share is $96.Its price-earnings ratio equals:

Correct AnswerverifiedShow Answer

Par value of a stock refers to the:

Correct AnswerverifiedShow Answer

Stock is attractive to investors because stockholders are not liable for the corporation's actions and debts and because stock is easily transferred.

Correct AnswerverifiedShow Answer

Preferred stock which confers rights to prior periods' unpaid dividends even if they were not declared is called:

Correct AnswerverifiedShow Answer

A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding.The journal entry to record the payment of the cash dividend is:

Correct AnswerverifiedShow Answer

Companies report prior period adjustments,net of any income tax effects in the:

Correct AnswerverifiedShow Answer

Fetzer Company declared a $0.55 per share cash dividend.The company has 200,000 shares authorized,190,000 shares issued,and 8,000 shares in treasury stock.The journal entry to record the dividend declaration is:

Correct AnswerverifiedShow Answer

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(1)$0.88 * (18,000 shares − 2,...
View Answer

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