Question 1

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share. The issue price was $10 per share. The entry to record this transaction would be:

Accepted Answer

A)   Debit Cash $50,000; credit Common Stock $50,000.
B)   Debit Common Stock $50,000; credit Cash $50,000.
C)   Debit Common Stock $25,000; debit Paid-in Capital in Excess of Par Value, Common Stock $5,000; credit Common Stock $45,000.
D)   Debit Cash $50,000; credit Paid-in Capital in Excess of Stated Value, Common Stock $45,000; credit Common Stock $5,000.
E)   Debit Treasury Stock $50,000; credit Cash $50,000.F) C) and E)
G) C) and D) D

Question 2

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 3

Changes in accounting estimates are:

Accepted Answer

A)   Accounted for with a cumulative "catch-up" adjustment.
B)   Accounted for in current and future periods.
C)   Considered accounting errors.
D)   Extraordinary items.
E)   Reported as prior period adjustments.F) A) and B)
G) C) and D) B

Question 4

A company paid $0.85 in cash dividends per share. Its earnings per share is $3.50, and its market price per share is $35.50. Its dividend yield equals:

Accepted Answer

A)   21.4%.
B)   2.4%.
C)   9.9%.
D)   24.2%.
E)   2.0%.F) C) and D)
G) A) and E)

Question 5

West Company declared a $0.50 per share cash dividend. The company has 190,000 shares issued, and 10,000 shares in treasury stock. The journal entry to record the payment of the dividend is:

Accepted Answer

A)   Debit Common Dividends Payable $90,000; credit Cash $90,000.
B)   Debit Retained Earnings $5,000; credit Common Dividends Payable $5,000.
C)   Debit Retained Earnings $90,000; credit Common Dividends Payable $90,000.
D)   Debit Retained Earnings $95,000; credit Common Dividends Payable $95,000.
E)   Debit Common Dividends Payable $95,000; credit Cash $95,000.F) C) and E)
G) B) and E)

Question 6

If a company has noncumulative preferred stock, basic earnings per share is equal to net income less preferred dividends declared divided by the number of weighted average common shares outstanding.

Accepted Answer

A) True 
 B)False

Question 7

Changes in retained earnings are commonly reported in the:

Accepted Answer

A)   Single-step income statement.
B)   Statement of stockholders' equity.
C)   Balance sheet.
D)   Multiple-step income statement.
E)   Statement of cash flows.F) C) and D)
G) B) and E)

Question 8

Corporations avoid many of the state regulations and controls that proprietorships and partnerships are subject to.

Accepted Answer

A) True 
 B)False

Question 9

Stated value stock is no-par stock that is assigned a "stated" value per share by the corporation's board of directors.

Accepted Answer

A) True 
 B)False

Question 10

Prior to June 30, a company has never had any treasury stock transactions. A company repurchased 100 shares of its $1 par common stock on June 30 for $40 per share. On July 20, it reissued 50 of these shares at $46 per share. On August 1, it reissued 20 of the shares at $38 per share.
- What is the journal entry necessary to record the reissuance of treasury stock on July 20?

Accepted Answer

A)   Debit Common Stock $20; debit Treasury Stock $2,290; credit Cash $2,300.
B)   Debit Common Stock $2,300; credit Cash $2,300.
C)   Debit Cash $2,300; credit Treasury Stock $2,300.
D)   Debit Cash $2,300; credit Paid-in Capital, Treasury Stock $300; credit Treasury Stock $2,000.
E)   Debit Common Stock $2,300; credit Treasury Stock $2,000; credit Paid-In Capital, Treasury Stock $300.F) B) and E)
G) A) and C)

Question 11

Sweet Company's outstanding stock consists of 1,000 shares of cumulative 5% preferred stock with a $100 par value and 10,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.   Dividend Declared   year 1 $2,000 year 2 $6,000 year 3 $32,000\begin{array}{ll}&	ext { Dividend Declared }\\ 	ext { year 1 } & \$ 2,000 \	ext { year 2 } & \$ 6,000 \	ext { year 3 } & \$ 32,000\end{array}  year 1  year 2  year 3 ​ Dividend Declared $2,000$6,000$32,000​

- 
The total amount of dividends paid to preferred and common shareholders over the three-year period is:

Accepted Answer

A)   $12,000 preferred; $28,000 common.
B)   $10,000 preferred; $30,000 common.
C)   $15,000 preferred; $25,000 common.
D)   $5,000 preferred; $35,000 common.
E)   $11,000 preferred; $29,000 common. F) B) and C)
G) A) and E)

Question 12

Participating preferred stock has a feature that allows its holders to share with common shareholders in any dividends paid in excess of the percent or dollar amount stated on the preferred stock.

Accepted Answer

A) True 
 B)False

Question 13

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 $100,100; credit Common Dividends Payable $100,100.
B)   Debit Retained Earnings $110,000; credit Common Dividends Payable $110,000.
C)   Debit Common Dividends Payable $104,500; credit Cash $104,500.
D)   Debit Retained Earnings $104,500; credit Common Dividends Payable $104,500.
E)   Debit Common Dividends Payable $100,100; credit Cash $100,100.F) A) and E)
G) B) and E)

Question 14

A company has 500 shares of $50 par value preferred stock outstanding, and the call price of its preferred stock is $60 per share. It also has 20,000 shares of common stock outstanding, and the total value of its stockholders' equity is $680,000. The company's book value per common share equals:

Accepted Answer

A)   $31.71.
B)   $33.17.
C)   $32.50.
D)   $60.00.
E)   $32.75.F) B) and C)
G) B) and D)

Question 15

Stated value of no-par stock is:

Accepted Answer

A)   The difference between the par value of stock and the amount below or above par value paid-in by the stockholder.
B)   An amount assigned to no-par stock by the corporation's board of directors.
C)   The market value of the stock on the date of issuance.
D)   An amount assigned to par value stock by the state of incorporation.
E)   Another name for redemption value.F) C) and D)
G) A) and E)

Question 16

On September 1, Ziegler Corporation had 50,000 shares of $5 par value common stock, and $1,500,000 of retained earnings. On that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. The general journal entry to record this transaction is:

Accepted Answer

A)   Debit Retained Earnings $250,000; credit Common Stock $250,000.
B)   No entry is made for this transaction.
C)   Debit Retained Earnings $750,000; credit Common Stock $750,000.
D)   Debit Retained Earnings $750,000; credit Common Stock Split Distributable $750,000.
E)   Debit Retained Earnings $250,000; credit Stock Split Payable $250,000.F) A) and B)
G) B) and E)

Question 17

The amount assigned per share to stock by the corporation in its charter is the ________.

Accepted Answer

The answer of The amount assigned per share to stock...

Question 18

Book value per common share is computed by:

Accepted Answer

A)   Dividing the number of common shares outstanding by stockholders' equity applicable to common shares.
B)   Dividing total assets by the number of shares outstanding.
C)   Dividing stockholders' equity applicable to common shares by the number of common shares outstanding.
D)   Multiplying the number of common shares outstanding times the market price per common share.
E)   Multiplying the number of common shares outstanding by par value per share.F) A) and C)
G) A) and E) C

Question 19

A premium on common stock:

Accepted Answer

A)   Represents profit from issuing stock.
B)   Is prohibited in most states.
C)   Occurs when a corporation sells its stock for more than par or stated value.
D)   Represents capital gain on sale of stock.
E)   Is the difference between par value and issue price when the amount paid is below par.F) A) and D)
G) A) and C)

Question 20

The total amount of cash and other assets the corporation receives from its stockholders in exchange for common stock is called ________.

Accepted Answer

The answer of The total amount of cash and other...

Exam 13: Accounting for Corporations

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share. The issue price was $10 per share. The entry to record this transaction would be:

Correct Answer
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D

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

Changes in accounting estimates are:

Correct Answer
verified
B

A company paid $0.85 in cash dividends per share. Its earnings per share is $3.50, and its market price per share is $35.50. Its dividend yield equals:

Correct Answer
verified

West Company declared a $0.50 per share cash dividend. The company has 190,000 shares issued, and 10,000 shares in treasury stock. The journal entry to record the payment of the dividend is:

Correct Answer
verified

If a company has noncumulative preferred stock, basic earnings per share is equal to net income less preferred dividends declared divided by the number of weighted average common shares outstanding.

Correct Answer
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Changes in retained earnings are commonly reported in the:

Correct Answer
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Corporations avoid many of the state regulations and controls that proprietorships and partnerships are subject to.

Correct Answer
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Stated value stock is no-par stock that is assigned a "stated" value per share by the corporation's board of directors.

Correct Answer
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Correct Answer
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Correct Answer
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Participating preferred stock has a feature that allows its holders to share with common shareholders in any dividends paid in excess of the percent or dollar amount stated on the preferred stock.

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 company has 500 shares of $50 par value preferred stock outstanding, and the call price of its preferred stock is $60 per share. It also has 20,000 shares of common stock outstanding, and the total value of its stockholders' equity is $680,000. The company's book value per common share equals:

Correct Answer
verified

Stated value of no-par stock is:

Correct Answer
verified

On September 1, Ziegler Corporation had 50,000 shares of $5 par value common stock, and $1,500,000 of retained earnings. On that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. The general journal entry to record this transaction is:

Correct Answer
verified

The amount assigned per share to stock by the corporation in its charter is the ________.

Correct Answer
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Book value per common share is computed by:

Correct Answer
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C

A premium on common stock:

Correct Answer
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The total amount of cash and other assets the corporation receives from its stockholders in exchange for common stock is called ________.

Correct Answer
verified

Exam 13: Accounting for Corporations

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share. The issue price was $10 per share. The entry to record this transaction would be:

Correct AnswerverifiedD

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

Changes in accounting estimates are:

Correct AnswerverifiedB

A company paid $0.85 in cash dividends per share. Its earnings per share is $3.50, and its market price per share is $35.50. Its dividend yield equals:

Correct AnswerverifiedShow Answer

West Company declared a $0.50 per share cash dividend. The company has 190,000 shares issued, and 10,000 shares in treasury stock. The journal entry to record the payment of the dividend is:

Correct AnswerverifiedShow Answer

If a company has noncumulative preferred stock, basic earnings per share is equal to net income less preferred dividends declared divided by the number of weighted average common shares outstanding.

Correct AnswerverifiedShow Answer

Changes in retained earnings are commonly reported in the:

Correct AnswerverifiedShow Answer

Corporations avoid many of the state regulations and controls that proprietorships and partnerships are subject to.

Correct AnswerverifiedShow Answer

Stated value stock is no-par stock that is assigned a "stated" value per share by the corporation's board of directors.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Participating preferred stock has a feature that allows its holders to share with common shareholders in any dividends paid in excess of the percent or dollar amount stated on the preferred stock.

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 company has 500 shares of $50 par value preferred stock outstanding, and the call price of its preferred stock is $60 per share. It also has 20,000 shares of common stock outstanding, and the total value of its stockholders' equity is $680,000. The company's book value per common share equals:

Correct AnswerverifiedShow Answer

Stated value of no-par stock is:

Correct AnswerverifiedShow Answer

On September 1, Ziegler Corporation had 50,000 shares of $5 par value common stock, and $1,500,000 of retained earnings. On that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. The general journal entry to record this transaction is:

Correct AnswerverifiedShow Answer

The amount assigned per share to stock by the corporation in its charter is the ________.

Correct AnswerverifiedShow Answer

Book value per common share is computed by:

Correct AnswerverifiedC

A premium on common stock:

Correct AnswerverifiedShow Answer

The total amount of cash and other assets the corporation receives from its stockholders in exchange for common stock is called ________.

Correct AnswerverifiedShow Answer

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D

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$875,000/3...
View Answer

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B

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C

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