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Pearland Company has 50,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding. The common stock is $1.00 par value. The preferred stock has a $100 par value, a 5% dividend rate, and is non-cumulative. On October 31, 2013, the company declares dividends of $0.25 per share for common stock and $5.00 per share for preferred stock. Please provide the journal entry for the declaration of dividends. Pearland Company has 50,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding. The common stock is $1.00 par value. The preferred stock has a $100 par value, a 5% dividend rate, and is non-cumulative. On October 31, 2013, the company declares dividends of $0.25 per share for common stock and $5.00 per share for preferred stock. Please provide the journal entry for the declaration of dividends.

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A company had $90,000 of Sales revenue and $55,000 of Expenses. Please provide the second of three year-end closing entries. A company had $90,000 of Sales revenue and $55,000 of Expenses. Please provide the second of three year-end closing entries.

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Which of the following describes the par value of stock?


A) Par value is the current selling price of stock.
B) Par value is the highest price for which a share can sell.
C) Par value is the price paid if the corporation purchases its own stock back.
D) Par value is a nominal, or minimal, amount assigned to shares of stock by the corporation.

E) C) and D)
F) A) and B)

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Onyx Company's income statement shows net income before income tax of $38,000. The company's tax return shows taxable income of $34,000. Company's tax rate is 40%. Which of the following entries would be used to record tax expense and tax payable?


A) Debit Income tax expense $15,200 and credit Cash $15,200.
B) Debit Deferred tax liability $13,600 and credit Income tax payable $13,600.
C) Debit Income tax expense $15,200, credit Deferred tax liability $1,600 and credit Income tax payable $13,600.
D) Debit Deferred tax liability $1,600, debit Income tax expense $13,600 and credit Income tax payable $15,200.

E) B) and C)
F) All of the above

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Which of the following occurs when a dividend is declared?


A) Liabilities increase.
B) Equity increases.
C) Liabilities decrease.
D) Assets increase.

E) C) and D)
F) B) and D)

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Which of the following is a disadvantage of the corporate form of business?


A) Separation of ownership and management
B) Continuous life
C) The potential to raise large amounts of capital
D) No mutual agency

E) B) and D)
F) None of the above

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On November 1, 2014, Oster Company declared a dividend of $3.00 per share. Oster Company has 20,000 shares of common stock outstanding and no preferred stock. Please provide the journal entry for the declaration of dividends. On November 1, 2014, Oster Company declared a dividend of $3.00 per share. Oster Company has 20,000 shares of common stock outstanding and no preferred stock. Please provide the journal entry for the declaration of dividends.

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The following information is from the balance sheet of Tudor Corporation as of December 31, 2014. The following information is from the balance sheet of Tudor Corporation as of December 31, 2014. What is the average issue price of the preferred stock shares? A)$107 B)$100 C)$176 D)$5,000 What is the average issue price of the preferred stock shares? A)$107 B)$100 C)$176 D)$5,000

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Which of the following represents one of the basic rights of stockholders?


A) Stockholders may sell their stock back to the company if they wish.
B) Stockholders may authorize a business contract on behalf of the corporation.
C) Stockholders may determine at what price the company issues stock.
D) Stockholders may receive dividends from corporate earnings.

E) All of the above
F) A) and D)

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Deferred tax can either be an asset or a liability.

A) True
B) False

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Reed Company reports the following information for the year 2013: Reed Company reports the following information for the year 2013: Please calculate the rate of return on common stockholders' equity. Please round to 3 decimal places. A) 0.054 B) 0.040 C) 0.043 D) 0.014 Please calculate the rate of return on common stockholders' equity. Please round to 3 decimal places.


A) 0.054
B) 0.040
C) 0.043
D) 0.014

E) B) and D)
F) A) and B)

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Occidental Produce Company has 40,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding. The common stock is $0.01 par value; the preferred stock is 4% non-cumulative, with $100 par value. On October 15, 2014, the company declares a total dividend payment of $40,000. What is the total amount of dividends that will be paid to the common shareholders?


A) $40,000
B) $32,000
C) $400
D) $4,500

E) C) and D)
F) A) and D)

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Which of the following shows the relationship between net income available to common shareholders and average common equity?


A) Net income
B) The rate of return on total assets
C) Inventory turnover
D) The rate of return on common stockholders' equity

E) B) and C)
F) A) and D)

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Which of the following statements describes the corporate characteristic termed no mutual agency?


A) The liabilities of the corporation cannot be extended to the personal assets of the shareholder.
B) Shares of stock can be readily bought and sold by investors on the open market.
C) Shareholders are not authorized to sign contracts or make business commitments on behalf of the corporation.
D) Corporations pay income tax on corporate earnings, and shareholders pay personal income tax on corporate dividends and gains from sale of stock.

E) All of the above
F) None of the above

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Please refer to the equity section of the balance sheet, below: Please refer to the equity section of the balance sheet, below: Assume there are $600 of preferred dividends in arrears which includes the current year. What is the book value per share of preferred stock? A) $42.70 per share B) $43.17 per share C) $56.00 per share D) $41.00 per share Assume there are $600 of preferred dividends in arrears which includes the current year. What is the book value per share of preferred stock?


A) $42.70 per share
B) $43.17 per share
C) $56.00 per share
D) $41.00 per share

E) A) and C)
F) A) and B)

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Bradley Corporation issued 10,000 shares of common stock on January 1, 2013. The stock has par value of $0.01 per share and was sold at $25 per share. Please provide the journal entry for this transaction. Bradley Corporation issued 10,000 shares of common stock on January 1, 2013. The stock has par value of $0.01 per share and was sold at $25 per share. Please provide the journal entry for this transaction.

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A company had $80,000 of Sales revenue and $75,000 of Expenses. Which of the following would be the second of three year-end closing entries?


A) Debit Income summary $75,000 and credit Expenses $75,000.
B) Debit Expenses $75,000 and credit Income summary $75,000.
C) Debit Income summary $5,000 and credit Retained earnings $5,000.
D) Debit Revenues $80,000 and credit Income summary $80,000.

E) A) and B)
F) A) and C)

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Lerner Company had the following transactions in 2013, its first year of operations. Lerner Company had the following transactions in 2013, its first year of operations. per share. At the end of 2013, what is the total amount of Stockholders' equity? A) $415,000 B) $120,000 C) $260,000 D) $380,000 per share. Lerner Company had the following transactions in 2013, its first year of operations. per share. At the end of 2013, what is the total amount of Stockholders' equity? A) $415,000 B) $120,000 C) $260,000 D) $380,000 At the end of 2013, what is the total amount of Stockholders' equity?


A) $415,000
B) $120,000
C) $260,000
D) $380,000

E) A) and D)
F) B) and D)

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Origami Company is considering a new project and needs to raise $800,000 of capital. Their after-tax net income would be $75,000 if they do not implement the new project. If the new project is implemented, it will add an additional $50,000 of profits before tax and interest. Origami's income tax rate is 40%. If they use debt financing, the interest will be at 5%. Origami has 25,000 shares of common stock outstanding and no preferred stock. They would have to issue an additional 10,000 shares of common stock to finance the project with equity capital. If Origami decides to use equity financing, their earnings per share will be higher than if they use debt.

A) True
B) False

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Which of the following describes the correct sequence of year-end closing entries?


A) Close Revenues to Income summary; close Expenses to Income summary; close Income summary to Retained earnings.
B) Close Expenses to Income summary; close Revenues to Income summary; close Income summary to Retained earnings.
C) Close Revenues to Income summary; close Income summary to Retained earnings; close Expenses to Retained earnings.
D) Close Revenues to Retained earnings; close Expenses to Retained earnings; close Income summary to Retained earnings.

E) A) and B)
F) A) and C)

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