Question 1

Typically,a profitable company that pays little or no dividends:

Accepted Answer

A)   is a bad investment.
B)   will reinvest profits which can lead to greater growth potential.
C)   will experience relatively stable stock prices over time.
D)   will appeal to investors who desire distributions of profit.E) All of the above
F) A) and B)

Question 2

Marble Corporation had the following balances in its stockholders' equity accounts at December 31,2015: 
  
The following transactions occurred during 2016:
 
  
 ?Required:
Based on the above information,prepare a statement of stockholders' equity for 2016.

Accepted Answer

The answer of Marble Corporation had the following balances in...

Question 3

EPS is a good predictor of:

Accepted Answer

A)   future interest costs.
B)   financial leverage.
C)   future cash receipts.
D)   future stock prices.E) None of the above
F) B) and D)

Question 4

Preferred stock is generally classified as stockholders' equity under both GAAP and IFRS.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements about the declaration and payment of cash dividends is correct?

Accepted Answer

A)   Declaration and payment of cash dividends will reduce the amount of net income.
B)   Declaration and payment of cash dividends will not reduce the Retained Earnings balance.
C)   Declaration and payment of cash dividends will reduce the amount of cash available to invest in assets.
D)   Declaration and payment of cash dividends is calculated on the amount of shares of stock issued, not the amount of shares outstanding.E) B) and C)
F) None of the above

Question 6

In an IPO on May 1,2009,Timmy Hilfigure purchased 1,000 shares of Abner Crummie,Inc.for $5,000.On April 30,2015,Timmy Hilfigure sold the 1,000 shares for $8,000 to Ralph Loring.What is the effect of the sale on April 30,2015?

Accepted Answer

A)   Abner Crummie, Inc. will record a $3,000 loss.
B)   Abner Crummie, Inc. will record a $3,000 gain.
C)   Abner Crummie, Inc. will not be directly affected by this transaction.
D)   Abner Crummie, Inc. will record a decrease in Cash of $8,000.E) None of the above
F) B) and D)

Question 7

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 current number of outstanding shares after these transactions have been accounted for is:

Accepted Answer

A)   8 million shares.
B)   20 million shares.
C)   10 million shares.
D)   9 million shares.E) A) and B)
F) B) and C)

Question 8

Earnings per share (EPS) can be affected by all of the following except:

Accepted Answer

A)   how the company chose to finance its operations.
B)   the method of depreciation.
C)   the inventory costing method.
D)   classification of debt as current or long-term.E) C) and D)
F) A) and B)

Question 9

The effect of a stock dividend is to:

Accepted Answer

A)   decrease total assets and stockholders' equity.
B)   change the composition of stockholders' equity.
C)   decrease total assets and total liabilities.
D)   increase the market value per share of common shares.E) None of the above
F) All of the above

Question 10

A partnership:

Accepted Answer

A)   has two or more co-owners.
B)   is a not-for- profit business .
C)   is incorporated.
D)   is a separate legal entity.E) C) and D)
F) A) and D)

Question 11

A corporate charter specifies that the company may sell up to 20 million shares of stock.The company issues 12 million shares to investors and later repurchases 3 million shares.The number of issued shares after these transactions have been accounted for is:

Accepted Answer

A)   12 million shares.
B)   11 million shares.
C)   9 million shares.
D)   5 million shares.E) B) and D)
F) A) and C)

Question 12

Which of the following statements about stock dividends is correct?

Accepted Answer

A)   Stock dividends are reported on the income statement.
B)   Stock dividends are reported on the Statement of Stockholders' Equity.
C)   Stock dividends increase total stockholders' equity.
D)   Stock dividends decrease total stockholders' equity.E) B) and C)
F) None of the above

Question 13

Large stock dividends are recorded at ______ and small stock dividends are recorded at ______.

Accepted Answer

A)   cost; par value
B)   par value; market value
C)   par value; par value
D)   cost; costE) B) and C)
F) A) and D)

Question 14

Tyler Corporation was organized in 2015.Its corporate charter authorized the issuance of 50,000 shares of common stock,par value $5 per share,and 10,000 shares of 8% preferred stock,par value $25 per share.The following transactions took place during 2015:
  
Required:
Part a.Prepare journal entries for each of the following transactions:
Part b.Compute the number of shares of common stock issued and outstanding at December 31,2015.

Accepted Answer

The answer of Tyler Corporation was organized in 2015.Its corporate...

Question 15

Contributed capital totals $30,000,Retained Earnings equals $65,000,Treasury Stock equals $18,000,and Common Stock equals $10,000.If the company does not have any accumulated other comprehensive income (loss) ,stockholders' equity,what is the total amount of stockholders' equity?

Accepted Answer

A)   $113,000
B)   $77,000
C)   $123,000
D)   $87,000E) A) and B)
F) C) and D)

Question 16

A corporation's board of directors could prefer a stock split to a stock dividend because a stock split:

Accepted Answer

A)   increases the market price of the stock.
B)   reduces Retained Earnings, so the company pays less taxes.
C)   does not reduce Retained Earnings, so it does not reduce the ability to declare a cash dividend in the future.
D)   increases total stockholders' equity and allows the corporation more flexibility.E) None of the above
F) A) and B)

Question 17

What effect does the purchase of treasury stock have on the balance sheet?

Accepted Answer

The answer of What effect does the purchase of treasury...

Question 18

A company sells 1 million shares of common stock with no par value for $15 a share.In recording the transaction,it would debit:

Accepted Answer

A)   Cash and credit Additional Paid-in Capital for $15 million.
B)   Cash and credit Common Stock for $15 million.
C)   Common Stock and credit Cash for $15 million.
D)   Common Stock and credit Additional Paid-in Capital for $15 million.E) A) and C)
F) B) and C)

Question 19

Which one of the following events would not require a journal entry on a corporation's books?

Accepted Answer

A)   2-for-1 stock split
B)   100% stock dividend
C)   2% stock dividend
D)   $1 per share cash dividendE) A) and B)
F) A) and C)

Question 20

The return on equity ratio is calculated as:

Accepted Answer

A)   dividends paid divided by the average book value of stockholders' equity.
B)   net income divided by the average number of outstanding common shares.
C)   dividends divided by the average number of total shares.
D)   (net income less preferred dividends)  divided by average common stockholders' equity.E) B) and C)
F) A) and B)

Exam 11: Reporting and Interpreting Stockholders Equity

Which of the following statements about stock dividends is correct?

Correct Answer
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In an IPO on May 1,2009,Timmy Hilfigure purchased 1,000 shares of Abner Crummie,Inc.for $5,000.On April 30,2015,Timmy Hilfigure sold the 1,000 shares for $8,000 to Ralph Loring.What is the effect of the sale on April 30,2015?

Correct Answer
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A partnership:

Correct Answer
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Which one of the following events would not require a journal entry on a corporation's books?

Correct Answer
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Preferred stock is generally classified as stockholders' equity under both GAAP and IFRS.

Correct Answer
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Contributed capital totals $30,000,Retained Earnings equals $65,000,Treasury Stock equals $18,000,and Common Stock equals $10,000.If the company does not have any accumulated other comprehensive income (loss) ,stockholders' equity,what is the total amount of stockholders' equity?

Correct Answer
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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 current number of outstanding shares after these transactions have been accounted for is:

Correct Answer
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Typically,a profitable company that pays little or no dividends:

Correct Answer
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Which of the following statements about the declaration and payment of cash dividends is correct?

Correct Answer
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Marble Corporation had the following balances in its stockholders' equity accounts at December 31,2015: The following transactions occurred during 2016: ?Required: Based on the above information,prepare a statement of stockholders' equity for 2016.

Correct Answer
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A company sells 1 million shares of common stock with no par value for $15 a share.In recording the transaction,it would debit:

Correct Answer
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A corporate charter specifies that the company may sell up to 20 million shares of stock.The company issues 12 million shares to investors and later repurchases 3 million shares.The number of issued shares after these transactions have been accounted for is:

Correct Answer
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EPS is a good predictor of:

Correct Answer
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Correct Answer
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A corporation's board of directors could prefer a stock split to a stock dividend because a stock split:

Correct Answer
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What effect does the purchase of treasury stock have on the balance sheet?

Correct Answer
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The return on equity ratio is calculated as:

Correct Answer
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Earnings per share (EPS) can be affected by all of the following except:

Correct Answer
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Large stock dividends are recorded at and small stock dividends are recorded at .

Correct Answer
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The effect of a stock dividend is to:

Correct Answer
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Exam 11: Reporting and Interpreting Stockholders Equity

Which of the following statements about stock dividends is correct?

Correct AnswerverifiedShow Answer

In an IPO on May 1,2009,Timmy Hilfigure purchased 1,000 shares of Abner Crummie,Inc.for $5,000.On April 30,2015,Timmy Hilfigure sold the 1,000 shares for $8,000 to Ralph Loring.What is the effect of the sale on April 30,2015?

Correct AnswerverifiedShow Answer

A partnership:

Correct AnswerverifiedShow Answer

Which one of the following events would not require a journal entry on a corporation's books?

Correct AnswerverifiedShow Answer

Preferred stock is generally classified as stockholders' equity under both GAAP and IFRS.

Correct AnswerverifiedShow Answer

Contributed capital totals $30,000,Retained Earnings equals $65,000,Treasury Stock equals $18,000,and Common Stock equals $10,000.If the company does not have any accumulated other comprehensive income (loss) ,stockholders' equity,what is the total amount of stockholders' equity?

Correct AnswerverifiedShow Answer

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 current number of outstanding shares after these transactions have been accounted for is:

Correct AnswerverifiedShow Answer

Typically,a profitable company that pays little or no dividends:

Correct AnswerverifiedShow Answer

Which of the following statements about the declaration and payment of cash dividends is correct?

Correct AnswerverifiedShow Answer

Marble Corporation had the following balances in its stockholders' equity accounts at December 31,2015: The following transactions occurred during 2016: ?Required: Based on the above information,prepare a statement of stockholders' equity for 2016.

Correct AnswerverifiedShow Answer

A company sells 1 million shares of common stock with no par value for $15 a share.In recording the transaction,it would debit:

Correct AnswerverifiedShow Answer

A corporate charter specifies that the company may sell up to 20 million shares of stock.The company issues 12 million shares to investors and later repurchases 3 million shares.The number of issued shares after these transactions have been accounted for is:

Correct AnswerverifiedShow Answer

EPS is a good predictor of:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A corporation's board of directors could prefer a stock split to a stock dividend because a stock split:

Correct AnswerverifiedShow Answer

What effect does the purchase of treasury stock have on the balance sheet?

Correct AnswerverifiedShow Answer

The return on equity ratio is calculated as:

Correct AnswerverifiedShow Answer

Earnings per share (EPS) can be affected by all of the following except:

Correct AnswerverifiedShow Answer

Large stock dividends are recorded at ______ and small stock dividends are recorded at ______.

Correct AnswerverifiedShow Answer

The effect of a stock dividend is to:

Correct AnswerverifiedShow Answer

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Large stock dividends are recorded at and small stock dividends are recorded at .

Correct Answer
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