Question 1

Pug Corporation has 10,000 shares of $10 par common stock outstanding and 20,000 shares of $100 par, 6% noncumulative, nonparticipating preferred stock outstanding. Dividends have not been paid for the past two years. This year, a $150,000 dividend will be paid. What are the dividends per share for preferred and common, respectively?

Accepted Answer

A)  $7.50; $0.
B)  $6; $3.
C)  $6; $1.50.
D)  None of these is correct.Preferred: $6 per share 20,000 = $120,000; $120,000 / 20,000 shares = $6 per share Common: ($150,000 $120,000) /10,000 = $3 per shareE) B) and C)
F) All of the above

Question 2

The common stock account on a company's balance sheet is measured as:

Accepted Answer

A)  The number of common shares outstanding multiplied by the stock's par value per share.
B)  The number of common shares outstanding multiplied by the stock's current market value per share.
C)  The number of common shares issued multiplied by the stock's par value per share.
D)  None of these is correct.E) B) and D)
F) A) and B)

Question 3

Accumulated other comprehensive income is reported:

Accepted Answer

A)  In the balance sheet as an asset.
B)  In the balance sheet as a liability.
C)  In the balance sheet as a component of shareholders' equity.
D)  In the statement of comprehensive income.E) B) and C)
F) A) and D)

Question 4

Stock dividends cause a reduction in retained earnings, but they never reduce total shareholders' equity.

Accepted Answer

A) True 
 B)False

Question 5

Beagle Corporation has 20,000 shares of $10 par common stock outstanding and 10,000 shares of $100 par, 6% cumulative, nonparticipating preferred stock outstanding. Dividends have not been paid for the past two years. This year, a $300,000 dividend will be paid. What are the dividends per share payable to preferred and common, respectively?

Accepted Answer

A)  $6; $12.
B)  $18; $6.
C)  $6; $6.
D)  None of these is correct.Preferred: $6 3 10,000 = $180,000 Common: ($300,000 $180,000) /20,000 = $6E) All of the above
F) A) and C)

Question 6

What was the average cost per share of the treasury stock purchased by Stubblefield during 2006 and 2007, respectively?

Accepted Answer

In 2006: $122,906/6,...

Question 7

Common shareholders usually have all of the following rights except:

Accepted Answer

A)  To share in the profits.
B)  To share in assets upon liquidation.
C)  To elect a board of directors.
D)  To participate in the day-to-day operations.E) A) and B)
F) B) and D)

Question 8

The prescribed accounting treatment for stock dividends implicitly assumes that shareholders are fooled by "small" stock dividends and benefit by the market value of their additional shares. Explain this statement. Is it logical?

Accepted Answer

For a stock dividend of less than 25%, a...

Question 9

In January, 2009, Despot recorded a transaction with this journal entry: The transaction was for the:

Accepted Answer

A)  Issue of 2 million shares of common stock at par value
B)  Issue of common stock for $150 million in cash
C)  Receipt of $20 per share for a new stock issue
D)  All of these are correct.E) None of the above
F) C) and D)

Question 10

On January 1, 2009, the board of directors of Goby Inc. declared a $540,000 dividend. The following data are from the balance sheet of Goby on that date: How much is the liquidating dividend?

Accepted Answer

A)  $140,000
B)  $240,000
C)  $290,000
D)  None of these is correct.E) All of the above
F) B) and C)

Question 11

Retained earnings represents a company's:

Accepted Answer

A)  Undistributed net income.
B)  Undistributed net assets.
C)  Extra paid-in capital.
D)  Undistributed cash.E) B) and C)
F) A) and B)

Question 12

Paid-in capital in excess of par is reported:

Accepted Answer

A)  As a reduction of shareholders' equity.
B)  As a noncurrent asset.
C)  As a noncurrent liability.
D)  As an increase in shareholders' equity.E) A) and B)
F) All of the above

Question 13

What ($ in 000s)  was shareholders' equity as of December 31, 2010?

Accepted Answer

A)  $38,100.
B)  $37,450.
C)  $38,450.
D)  $38,350.E) B) and D)
F) A) and B)

Question 14

What is the difference between a stock split and a stock split affected in the form of a stock dividend?

Accepted Answer

A stock split is usually motivated by a ...

Question 15

When preferred stock is purchased by the issuing corporation at a price below the original issue price and the stock is retired, the transaction:

Accepted Answer

A)  Increases net income for the year.
B)  Increases retained earnings.
C)  Increases revenue for the year.
D)  Increases paid-in capital share repurchase.E) All of the above
F) A) and B)

Question 16

Characteristics of the corporate form that have led to the growth of this form of business ownership include all of the following except:

Accepted Answer

A)  Ease of raising capital.
B)  Low government regulation.
C)  Limited liability.
D)  Ease of ownership transfer.E) All of the above
F) C) and D)

Question 17

What ($ in 000s)  was shareholders' equity as of December 31, 2009?

Accepted Answer

A)  $29,600.
B)  $35,600.
C)  $30,400.
D)  $28,600.E) A) and B)
F) A) and C)

Question 18

Authorized common stock refers to the total number of shares:

Accepted Answer

A)  Outstanding.
B)  Issued.
C)  Issued and outstanding.
D)  That can be issued.E) B) and C)
F) C) and D)

Question 19

Cash dividends become a binding liability as of the record date.

Accepted Answer

A) True 
 B)False

Question 20

In February, 2009, Despot declared cash dividends of $12 million to be paid in April of that year. What effect did the April transaction have on Despot's accounts?

Accepted Answer

A)  Decreased assets and liabilities
B)  Decreased assets and shareholders' equity
C)  Increased liabilities and decreased shareholders' equity
D)  None of these is correct.E) C) and D)
F) B) and C)

Exam 18: Shareholders Equity

What is the difference between a stock split and a stock split affected in the form of a stock dividend?

Correct Answer
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A stock split is usually motivated by a ...
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Characteristics of the corporate form that have led to the growth of this form of business ownership include all of the following except:

Correct Answer
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Retained earnings represents a company's:

Correct Answer
verified

In January, 2009, Despot recorded a transaction with this journal entry: The transaction was for the:

Correct Answer
verified

Correct Answer
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In February, 2009, Despot declared cash dividends of $12 million to be paid in April of that year. What effect did the April transaction have on Despot's accounts?

Correct Answer
verified

Correct Answer
verified

Common shareholders usually have all of the following rights except:

Correct Answer
verified

Accumulated other comprehensive income is reported:

Correct Answer
verified

What ($ in 000s) was shareholders' equity as of December 31, 2010?

Correct Answer
verified

When preferred stock is purchased by the issuing corporation at a price below the original issue price and the stock is retired, the transaction:

Correct Answer
verified

The common stock account on a company's balance sheet is measured as:

Correct Answer
verified

The prescribed accounting treatment for stock dividends implicitly assumes that shareholders are fooled by "small" stock dividends and benefit by the market value of their additional shares. Explain this statement. Is it logical?

Correct Answer
verified
For a stock dividend of less than 25%, a...
View Answer

What ($ in 000s) was shareholders' equity as of December 31, 2009?

Correct Answer
verified

On January 1, 2009, the board of directors of Goby Inc. declared a $540,000 dividend. The following data are from the balance sheet of Goby on that date: How much is the liquidating dividend?

Correct Answer
verified

Cash dividends become a binding liability as of the record date.

Correct Answer
verified

Paid-in capital in excess of par is reported:

Correct Answer
verified

Stock dividends cause a reduction in retained earnings, but they never reduce total shareholders' equity.

Correct Answer
verified

Authorized common stock refers to the total number of shares:

Correct Answer
verified

What was the average cost per share of the treasury stock purchased by Stubblefield during 2006 and 2007, respectively?

Correct Answer
verified
In 2006: $122,906/6,...
View Answer

Exam 18: Shareholders Equity

What is the difference between a stock split and a stock split affected in the form of a stock dividend?

Correct AnswerverifiedA stock split is usually motivated by a ...View AnswerShow Answer

Characteristics of the corporate form that have led to the growth of this form of business ownership include all of the following except:

Correct AnswerverifiedShow Answer

Retained earnings represents a company's:

Correct AnswerverifiedShow Answer

In January, 2009, Despot recorded a transaction with this journal entry: The transaction was for the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In February, 2009, Despot declared cash dividends of $12 million to be paid in April of that year. What effect did the April transaction have on Despot's accounts?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Common shareholders usually have all of the following rights except:

Correct AnswerverifiedShow Answer

Accumulated other comprehensive income is reported:

Correct AnswerverifiedShow Answer

What ($ in 000s) was shareholders' equity as of December 31, 2010?

Correct AnswerverifiedShow Answer

When preferred stock is purchased by the issuing corporation at a price below the original issue price and the stock is retired, the transaction:

Correct AnswerverifiedShow Answer

The common stock account on a company's balance sheet is measured as:

Correct AnswerverifiedShow Answer

The prescribed accounting treatment for stock dividends implicitly assumes that shareholders are fooled by "small" stock dividends and benefit by the market value of their additional shares. Explain this statement. Is it logical?

Correct AnswerverifiedFor a stock dividend of less than 25%, a...View AnswerShow Answer

What ($ in 000s) was shareholders' equity as of December 31, 2009?

Correct AnswerverifiedShow Answer

On January 1, 2009, the board of directors of Goby Inc. declared a $540,000 dividend. The following data are from the balance sheet of Goby on that date: How much is the liquidating dividend?

Correct AnswerverifiedShow Answer

Cash dividends become a binding liability as of the record date.

Correct AnswerverifiedShow Answer

Paid-in capital in excess of par is reported:

Correct AnswerverifiedShow Answer

Stock dividends cause a reduction in retained earnings, but they never reduce total shareholders' equity.

Correct AnswerverifiedShow Answer

Authorized common stock refers to the total number of shares:

Correct AnswerverifiedShow Answer

What was the average cost per share of the treasury stock purchased by Stubblefield during 2006 and 2007, respectively?

Correct AnswerverifiedIn 2006: $122,906/6,...View AnswerShow Answer

Correct Answer
verified
A stock split is usually motivated by a ...
View Answer

Correct Answer
verified

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
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified
For a stock dividend of less than 25%, a...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In 2006: $122,906/6,...
View Answer