Question 1

On March 31,2015,the Park Place Inc.shows the following data on their balance sheet:  Assume that Park Place sells 900 shares of treasury stock at $32 per share.What will the total stockholders' equity be after this transaction?

Accepted Answer

A)  $7,751,200
B)  $7,028,800
C)  $7,080,900
D)  $7,030,000E) A) and C)
F) A) and D)

Question 2

A corporation declares a dividend of $0.50 per share on 10,000 shares of common stock.Which of the following would be included in the entry to record the declaration?

Accepted Answer

A)  Retained Earnings would be debited for $5,000
B)  Paid-In Capital in Excess of Par-Common would be credited for $5,000
C)  Retained Earnings would be credited for $5,000
D)  Dividends Payable-Common would be debited for $5,000E) B) and C)
F) B) and D)

Question 3

On December 1,2015,Arther Inc.had 200,000 shares of $1 par value common stock issued and outstanding.The next day they declared and distributed a 50% stock dividend.The market value of the stock on that date was $9 per share.Provide the journal entry for the transaction.

Accepted Answer

The answer of On December 1,2015,Arther Inc.had 200,000 shares of...

Question 4

Which of the following statements is true?

Accepted Answer

A)  Appropriations of retained earnings require journal entries,but restrictions on retained earnings do not.
B)  No journal entries are needed to either appropriate or restrict retained earnings.
C)  Both appropriations and restrictions of retained earnings require journal entries.
D)  Restrictions on retained earnings must be journalized,but appropriations do not need to be journalized.E) B) and D)
F) A) and B)

Question 5

Which of the following is a true of the difference between a stock split and a stock dividend?

Accepted Answer

A)  A stock split will increase total stockholders' equity,but a stock dividend will not.
B)  Neither a stock split nor a stock dividend will increase total stockholders' equity.
C)  A stock dividend will increase total stockholders' equity,but a stock split will not.
D)  A stock split will decrease retained earnings,but a stock dividend will not.E) None of the above
F) B) and C)

Question 6

Preferred stock is a stock ________.

Accepted Answer

A)  that sells for a very high price
B)  that is distributed to employees of the company as a performance incentive
C)  that is distributed by corporations to avoid liquidation
D)  that gives its owners certain benefits over common stockE) A) and C)
F) None of the above

Question 7

A deficit occurs when a company has reoccurring losses and/or declares dividends in excess of retained earnings.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a reason for a company to announce a stock split?

Accepted Answer

A)  to defend against a hostile takeover
B)  to double the par value of the share
C)  to reduce the market price at which the stock is trading
D)  to provide the shareholders with something of value,when the company cannot afford a cash dividendE) All of the above
F) A) and D)

Question 9

Lerner Inc.had the following transactions in 2015,its first year of operations.  
-At the end of 2015,what is the total amount of stockholders' equity?

Accepted Answer

A)  $415,000
B)  $120,000
C)  $260,000
D)  $380,000E) A) and B)
F) B) and C)

Question 10

Occidental Produce Inc.has 40,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding.The common stock is $0.01 par value; the preferred stock is 4% noncumulative,with $100 par value.On October 15,2015,the company declares a total dividend payment of $40,000.What is the total amount of dividends that will be paid to the common stockholders?

Accepted Answer

A)  $40,000
B)  $32,000
C)  $400
D)  $4,500E) B) and C)
F) B) and D)

Question 11

On June 30,2015,Roger Inc.showed the following data on the equity section of their balance sheet:  On July 1,2015,the company declared and distributed a 5% stock dividend.The market value of the stock at that time was $13 per share.Following this transaction,what would be the new balance in the Common stock account?

Accepted Answer

A)  $147,000
B)  $26,000
C)  $66,000
D)  $246,000E) None of the above
F) B) and C)

Question 12

Which of the following occurs when a corporation distributes a stock dividend?

Accepted Answer

A)  Total liabilities would increase.
B)  Total stockholders' equity would increase.
C)  Total assets would decrease.
D)  Total stockholders' equity would be unchanged.E) None of the above
F) A) and B)

Question 13

Revival Corporation's annual report is follows. 
- Based on the information provided,find the rate of return on common stockholders' equity on March 31,2015.

Accepted Answer

A)  8.28%
B)  9.13%
C)  4.56%
D)  6.81%E) All of the above
F) B) and C)

Question 14

The declaration and payment of cash dividends cause a decrease in both assets (Cash)and stockholders' equity (Retained Earnings)for the corporation.

Accepted Answer

A) True 
 B)False

Question 15

A stock split,like any other stock issuance,cannot involve issuing more shares of stock than authorized in the corporate charter.

Accepted Answer

A) True 
 B)False

Question 16

On November 1,2015,Oster Inc.declared a dividend of $3.00 per share.Oster Inc.has 20,000 shares of common stock outstanding and no preferred stock.Which of the following is the journal entry needed to record the declaration of dividends?

Accepted Answer

A)  debit Dividends Payable-Common $60,000 and credit Retained Earnings $60,000
B)  debit Retained Earnings $60,000 and credit Cash $60,000
C)  debit Retained Earnings $60,000 and credit Dividends Payable-Common $60,000
D)  debit Cash $60,000 and credit Dividends Payable-Common $60,000E) B) and D)
F) A) and B)

Question 17

A dividend's declaration date is the date the corporation records which stockholders get dividend checks.

Accepted Answer

A) True 
 B)False  False

Question 18

Which of the following explains the term "lack of mutual agency" of a corporation?

Accepted Answer

A)  The liabilities of the corporation cannot be extended to the personal assets of the stockholder.
B)  Shares of stock can be readily bought and sold by investors on the open market.
C)  Stockholders are not authorized to sign contracts or make business commitments on behalf of the corporation.
D)  Corporations pay income tax on corporate earnings,and shareholders pay personal income tax on corporate dividends and gains from sale of stock.E) A) and B)
F) None of the above

Question 19

ABC has 45,000 shares of $10 par common stock outstanding.They offer a stock split of 4-for-1.The effect of the split will be ________.

Accepted Answer

A)  par stays at $10; total shares go to 11,250
B)  par drops to $5; total shares stay at 45,000
C)  par drops to $2.50; total shares go to 180,000
D)  par goes to $40; total shares go to 180,000E) C) and D)
F) A) and B)

Question 20

Stock dividends have no impact on the total amount of stockholders' equity.

Accepted Answer

A) True 
 B)False  True

Exam 13: Stockholders Equity

On March 31,2015,the Park Place Inc.shows the following data on their balance sheet: Assume that Park Place sells 900 shares of treasury stock at $32 per share.What will the total stockholders' equity be after this transaction?

Correct Answer
verified

A corporation declares a dividend of $0.50 per share on 10,000 shares of common stock.Which of the following would be included in the entry to record the declaration?

Correct Answer
verified

On December 1,2015,Arther Inc.had 200,000 shares of $1 par value common stock issued and outstanding.The next day they declared and distributed a 50% stock dividend.The market value of the stock on that date was $9 per share.Provide the journal entry for the transaction.

Correct Answer
verified
11ea84d1_1149_9e56_83dc_0d70711c51f9_TB3006_00

Which of the following statements is true?

Correct Answer
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Which of the following is a true of the difference between a stock split and a stock dividend?

Correct Answer
verified

Preferred stock is a stock ________.

Correct Answer
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A deficit occurs when a company has reoccurring losses and/or declares dividends in excess of retained earnings.

Correct Answer
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Which of the following is a reason for a company to announce a stock split?

Correct Answer
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Lerner Inc.had the following transactions in 2015,its first year of operations. -At the end of 2015,what is the total amount of stockholders' equity?

Correct Answer
verified

Correct Answer
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Correct Answer
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Which of the following occurs when a corporation distributes a stock dividend?

Correct Answer
verified

Revival Corporation's annual report is follows. - Based on the information provided,find the rate of return on common stockholders' equity on March 31,2015.

Correct Answer
verified

The declaration and payment of cash dividends cause a decrease in both assets (Cash)and stockholders' equity (Retained Earnings)for the corporation.

Correct Answer
verified

A stock split,like any other stock issuance,cannot involve issuing more shares of stock than authorized in the corporate charter.

Correct Answer
verified

On November 1,2015,Oster Inc.declared a dividend of $3.00 per share.Oster Inc.has 20,000 shares of common stock outstanding and no preferred stock.Which of the following is the journal entry needed to record the declaration of dividends?

Correct Answer
verified

A dividend's declaration date is the date the corporation records which stockholders get dividend checks.

Correct Answer
verified
False

Which of the following explains the term "lack of mutual agency" of a corporation?

Correct Answer
verified

ABC has 45,000 shares of $10 par common stock outstanding.They offer a stock split of 4-for-1.The effect of the split will be ________.

Correct Answer
verified

Stock dividends have no impact on the total amount of stockholders' equity.

Correct Answer
verified
True

Exam 13: Stockholders Equity

On March 31,2015,the Park Place Inc.shows the following data on their balance sheet: Assume that Park Place sells 900 shares of treasury stock at $32 per share.What will the total stockholders' equity be after this transaction?

Correct AnswerverifiedShow Answer

A corporation declares a dividend of $0.50 per share on 10,000 shares of common stock.Which of the following would be included in the entry to record the declaration?

Correct AnswerverifiedShow Answer

On December 1,2015,Arther Inc.had 200,000 shares of $1 par value common stock issued and outstanding.The next day they declared and distributed a 50% stock dividend.The market value of the stock on that date was $9 per share.Provide the journal entry for the transaction.

Correct Answerverified11ea84d1_1149_9e56_83dc_0d70711c51f9_TB3006_00

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Which of the following is a true of the difference between a stock split and a stock dividend?

Correct AnswerverifiedShow Answer

Preferred stock is a stock ________.

Correct AnswerverifiedShow Answer

A deficit occurs when a company has reoccurring losses and/or declares dividends in excess of retained earnings.

Correct AnswerverifiedShow Answer

Which of the following is a reason for a company to announce a stock split?

Correct AnswerverifiedShow Answer

Lerner Inc.had the following transactions in 2015,its first year of operations. -At the end of 2015,what is the total amount of stockholders' equity?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following occurs when a corporation distributes a stock dividend?

Correct AnswerverifiedShow Answer

Revival Corporation's annual report is follows. - Based on the information provided,find the rate of return on common stockholders' equity on March 31,2015.

Correct AnswerverifiedShow Answer

The declaration and payment of cash dividends cause a decrease in both assets (Cash)and stockholders' equity (Retained Earnings)for the corporation.

Correct AnswerverifiedShow Answer

A stock split,like any other stock issuance,cannot involve issuing more shares of stock than authorized in the corporate charter.

Correct AnswerverifiedShow Answer

On November 1,2015,Oster Inc.declared a dividend of $3.00 per share.Oster Inc.has 20,000 shares of common stock outstanding and no preferred stock.Which of the following is the journal entry needed to record the declaration of dividends?

Correct AnswerverifiedShow Answer

A dividend's declaration date is the date the corporation records which stockholders get dividend checks.

Correct AnswerverifiedFalse

Which of the following explains the term "lack of mutual agency" of a corporation?

Correct AnswerverifiedShow Answer

ABC has 45,000 shares of $10 par common stock outstanding.They offer a stock split of 4-for-1.The effect of the split will be ________.

Correct AnswerverifiedShow Answer

Stock dividends have no impact on the total amount of stockholders' equity.

Correct AnswerverifiedTrue

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11ea84d1_1149_9e56_83dc_0d70711c51f9_TB3006_00

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False

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True