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Exam 11: Reporting and Interpreting Stockholders Equity

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Question 131

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Phelps,Inc.had assets of $67,646,liabilities of $15,466,and 10,718 shares of outstanding common stock at December 31,2014.Net income for 2015 was $7,829.The company had assets of $79,571,liabilities of $18,551,10,771 shares of outstanding,and its stock was trading at a price of $10 per share at December 31,2016.Net income for 2016 was $9,993. Required: Part a.Calculate EPS for 2016. Part b.Calculate ROE for 2016. Part c.Calculate the Price/Earnings ratio for 2016

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Part a
2016 EPS = (Net income - Preferre...

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Question 132

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Which of the following statements about treasury stock is correct?

A) When a company reissues treasury stock for more than it originally paid for the stock, it does not report a gain.
B) When a company purchases treasury stock, it increases total stockholders' equity.
C) Treasury stock is reported as an asset on the balance sheet.
D) Treasury stock is reported as issued and outstanding stock.

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

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Question 133

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National Corp.has 100,000 shares authorized,70,000 shares issued and 5,000 shares of treasury stock.How many shares does National Corp.have outstanding?

Daffy Duct,Inc.issued 10,000 shares of no-par value common stock at $10 per share.Miss Hap,the bookkeeper,recorded the transaction with a $100,000 debit to Cash and $100,000 credit to Common stock.Which of the following statements about this situation is correct?

Harry owns 1,000 shares of stock in Xit Corporation.What is the effect on Xit Corporation if Harry dies?

Items such as unrealized gains and losses from pensions,foreign currencies or financial investments are reported as:

A corporate charter specifies that the company may sell up to 20 million shares of stock.The company sells 12 million shares to investors and later buys back 3 million shares.The number of authorized shares after these transactions are accounted for is:

Anthem Inc.issues 200,000 shares of stock with a par value of $0.01 for $150 per share.Three years later,it repurchases these shares for $80 per share.Anthem records the repurchase in which of the following ways?

A company originally issues 180,000 shares of stock at a price of $22; one year later the stock price is $40 per share,the number of outstanding shares is unchanged,and the company's net income for the year is $230,400.The P/E ratio at the end of the recent year is:

At the end of the accounting period,but before closing entries are made,Harry,the proprietor of Harry's Bar and Grill,has a debit balance of $24,500 in his drawing account and a credit balance of $72,300 in his capital account.Which of the following statements is correct?

McEnroe Inc.has outstanding 10 million shares of $2 par value common stock and 1 million shares of $4 par value preferred stock.The preferred stock has a 7% cumulative dividend preference.The company declares total dividends amounting to $50,000,$250,000,and $600,000 during 2015,2016,and 2017,respectively. Required: Part a.Compute the amount of dividends to be distributed to preferred and common shareholders during 2015. Part b.Compute the amount of dividends to be distributed to preferred and common shareholders during 2016. Part c.Compute the amount of dividends to be distributed to preferred and common shareholders during 2017.

Canton,Inc.issued 10,000 shares of $1 par value common stock at $10 per share.Mr.Smart,the bookkeeper,recorded this transaction with a $100,000 debit to Cash and a $100,000 credit to Common stock.As a result of this entry:

Which of the following statements about issued and outstanding stock is correct?