Question 1

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

Accepted Answer

A)  $100.
B)  $600.
C)  $1,000.
D)  $6,000.
E)  $7,000.F) A) and B)
G) A) and C)

Question 2

The amount of annual cash dividends distributed to common shareholders relative to the common stock's market value is the:

Accepted Answer

A)  Dividend payout ratio.
B)  Dividend yield.
C)  Price-earnings ratio.
D)  Current yield.
E)  Earnings per share.F) A) and B)
G) None of the above

Question 3

What is a corporation? Identify the key advantages and disadvantages of corporations.

Accepted Answer

A corporation is an entity created by la...

Question 4

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 payment of the dividend 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) A) and D)
G) None of the above

Question 5

A company has $200,000 of 10% noncumulative, nonparticipating, preferred stock outstanding, and $150,000 of common stock outstanding. In the company's first year of operation, no dividends were paid, but during the second year, it paid cash dividends of $25,000. Compute the dividends to be distributed to (1) preferred shares and (2) common shares.

Accepted Answer

(1) Preferred: 10% ×...

Question 6

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) B) and C)
G) C) and E)

Question 7

Avro Corporation has $875,000 in stockholders' equity and 350,000 weighted-average shares of common stock outstanding. Calculate the book value per common share.

Accepted Answer

$875,000/3...

Question 8

A stock _________________ keeps stockholder records and prepares official lists of stockholders for stockholder meetings and dividend payments.

Accepted Answer

The answer of A stock _________________ keeps stockholder records and...

Question 9

The board of directors of a corporation:

Accepted Answer

A)  Are elected by the corporate registrar.
B)  Are responsible for day-to-day operations of the business.
C)  Do not have the power to bind the corporation to contracts, due to lack of mutual agency.
D)  May not also be executive officers of the corporation, due to the separate entity principle.
E)  Are responsible for and have final authority for managing corporate activities.F) B) and D)
G) B) and C)

Question 10

The Discount on Common Stock account reflects:

Accepted Answer

A)  The difference between the par value of stock and its issue price when it is issued at a price below par value.
B)  One share's portion of the issued corporation's net assets recorded in its accounts.
C)  The difference between the par value of the stock and the amount paid-in by stockholders when the amount paid-in is more than par value.
D)  An amount of assets defined by state law that stockholders must invest and leave invested in a corporation.
E)  The amount a corporation must pay in addition to dividends in arrears if and when it exercises its right to retire a share of callable preferred stock.F) A) and D)
G) A) and E)

Question 11

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) A) and B)
G) A) and C)

Question 12

A corporation declared and issued a 15% stock dividend on October 1. The following information was available immediately prior to the dividend:  The amount that contributed capital will increase (decrease)  as a result of recording this stock dividend is:

Accepted Answer

A)  $45,000.
B)  $135,000.
C)  $(45,000) .
D)  $(135,000) .
E)  $0.F) A) and C)
G) A) and D)

Question 13

Record the following transactions of Naches Corporation in general journal form:
(a) Reacquired 8,000 of its own $3 par value common stock at $20 cash per share. The stock was originally issued at $15 per share.
(b) Sold 2,000 shares of the stock reacquired under part (a) at $23 cash per share.
(c) Sold 3,000 shares of the stock reacquired under part (a) at $19 cash per share.

Accepted Answer

The answer of Record the following transactions of Naches Corporation...

Question 14

All of the following statements regarding stock dividends are true except:

Accepted Answer

A)  Directors can use stock dividends to keep the market price of the stock affordable.
B)  Stock dividends provide evidence of management's confidence that the company is doing well.
C)  Stock dividends do not reduce assets or equity.
D)  Stock dividends decrease the number of shares outstanding.
E)  Stock dividends transfer a portion of equity from retained earnings to contributed capital.F) A) and B)
G) A) and C)

Question 15

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) B) and D)
G) A) and E)

Question 16

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 17

Special rights often granted to preferred stock include a preference for receiving dividends and additional voting privileges.

Accepted Answer

A) True 
 B)False

Question 18

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 payment 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) A) and E)
G) A) and B)

Question 19

If a corporation is authorized to issue 1,000 shares of $5 common stock, it is said to have $5,000 of stock outstanding.

Accepted Answer

A) True 
 B)False

Question 20

The least amount that the buyers of stock must contribute to the corporation or be subject to paying at a future date is called ____________________________.

Accepted Answer

minimum le...

Exam 11: Reporting and Analyzing Equity

The Discount on Common Stock account reflects:

Correct Answer
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Special rights often granted to preferred stock include a preference for receiving dividends and additional voting privileges.

Correct Answer
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Correct Answer
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All of the following statements regarding stock dividends are true except:

Correct Answer
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Correct Answer
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(1) Preferred: 10% ×...
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What is a corporation? Identify the key advantages and disadvantages of corporations.

Correct Answer
verified
A corporation is an entity created by la...
View Answer

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

Correct Answer
verified
The price-earnings ratio of a common sto...
View 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 payment of the dividend is:

Correct Answer
verified

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

Correct Answer
verified

A corporation declared and issued a 15% stock dividend on October 1. The following information was available immediately prior to the dividend: The amount that contributed capital will increase (decrease) as a result of recording this stock dividend is:

Correct Answer
verified

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

Correct Answer
verified

The amount of annual cash dividends distributed to common shareholders relative to the common stock's market value is the:

Correct Answer
verified

The least amount that the buyers of stock must contribute to the corporation or be subject to paying at a future date is called ____________________________.

Correct Answer
verified
minimum le...
View Answer

If a corporation is authorized to issue 1,000 shares of $5 common stock, it is said to have $5,000 of stock outstanding.

Correct Answer
verified

The board of directors of a corporation:

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 payment is:

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

A stock _________________ keeps stockholder records and prepares official lists of stockholders for stockholder meetings and dividend payments.

Correct Answer
verified

Avro Corporation has $875,000 in stockholders' equity and 350,000 weighted-average shares of common stock outstanding. Calculate the book value per common share.

Correct Answer
verified
$875,000/3...
View 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 Answer
verified

Exam 11: Reporting and Analyzing Equity

The Discount on Common Stock account reflects:

Correct AnswerverifiedShow Answer

Special rights often granted to preferred stock include a preference for receiving dividends and additional voting privileges.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All of the following statements regarding stock dividends are true except:

Correct AnswerverifiedShow Answer

Correct Answerverified(1) Preferred: 10% ×...View AnswerShow Answer

What is a corporation? Identify the key advantages and disadvantages of corporations.

Correct AnswerverifiedA corporation is an entity created by la...View AnswerShow Answer

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

Correct AnswerverifiedThe price-earnings ratio of a common sto...View AnswerShow 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 payment of the dividend is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A corporation declared and issued a 15% stock dividend on October 1. The following information was available immediately prior to the dividend: The amount that contributed capital will increase (decrease) as a result of recording this stock dividend is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The amount of annual cash dividends distributed to common shareholders relative to the common stock's market value is the:

Correct AnswerverifiedShow Answer

The least amount that the buyers of stock must contribute to the corporation or be subject to paying at a future date is called ____________________________.

Correct Answerverifiedminimum le...View AnswerShow Answer

If a corporation is authorized to issue 1,000 shares of $5 common stock, it is said to have $5,000 of stock outstanding.

Correct AnswerverifiedShow Answer

The board of directors of a corporation:

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 payment is:

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

A stock _________________ keeps stockholder records and prepares official lists of stockholders for stockholder meetings and dividend payments.

Correct AnswerverifiedShow Answer

Avro Corporation has $875,000 in stockholders' equity and 350,000 weighted-average shares of common stock outstanding. Calculate the book value per common share.

Correct Answerverified$875,000/3...View AnswerShow 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

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified
(1) Preferred: 10% ×...
View Answer

Correct Answer
verified
A corporation is an entity created by la...
View Answer

Correct Answer
verified
The price-earnings ratio of a common sto...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified
minimum le...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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$875,000/3...
View Answer

Correct Answer
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