Question 1

The return on common stockholders' equity is computed by dividing net income

Accepted Answer

A)  by ending common stockholders' equity.
B)  by average common stockholders' equity.
C)  less preferred dividends by ending common stockholders' equity.
D)  less preferred dividends by average common stockholders' equity.E) A) and B)
F) B) and D)

Question 2

Retro Company is authorized to issue 10,000 shares of 8%, $100 par value preferred stock and 500,000 shares of no-par common stock with a stated value of $1 per share.If Retro issues 10,000 shares of common stock to pay its recent attorney's bill of $50,000 for legal services on a land access dispute, which of the following would be the best journal entry for Retro to record?

Accepted Answer

The answer of Retro Company is authorized to issue 10,000...

Question 3

What is the total stockholders' equity based on the following account balances?

Accepted Answer

A)  $2,690,000.
B)  $2,930,000.
C)  $3,050,000.
D)  $2,180,000.E) None of the above
F) All of the above

Question 4

A stock split will

Accepted Answer

A)  have no effect on retained earnings.
B)  increase total paid-in capital.
C)  increase the total par value of the stock.
D)  have no effect on the par value per share of stock.E) All of the above
F) A) and B)

Question 5

Dividends in arrears are liabilities of the corporation.

Accepted Answer

A) True 
 B)False

Question 6

The board of directors of Benson Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2020.The dividend is to be paid on August 15, 2020, to stockholders of record on July 31, 2020.The correct entry to be recorded on August 15, 2020, will include a

Accepted Answer

A)  debit to Cash Dividends.
B)  credit to Cash Dividends.
C)  credit to Dividends Payable.
D)  debit to Dividends Payable.E) A) and B)
F) B) and C)

Question 7

Par value

Accepted Answer

A)  represents what a share of stock is worth.
B)  represents the original selling price for a share of stock.
C)  is established for a share of stock after it is issued.
D)  is the value assigned per share in the corporate charter.E) B) and C)
F) A) and C)

Question 8

The net effects on the corporation of the declaration and payment of a cash dividend are to

Accepted Answer

A)  decrease liabilities and decrease stockholders' equity.
B)  increase stockholders' equity and decrease liabilities.
C)  decrease assets and decrease stockholders' equity.
D)  increase assets and increase stockholders' equity.E) B) and C)
F) All of the above

Question 9

If common stock is issued for an amount greater than par value, the excess should be credited to

Accepted Answer

A)  Cash.
B)  Retained Earnings.
C)  Paid-in Capital in Excess of Par Value.
D)  Legal Capital.E) B) and C)
F) A) and B)

Question 10

The acquisition of treasury stock by a corporation

Accepted Answer

A)  increases its total assets and total stockholders' equity.
B)  decreases its total assets and total stockholders' equity.
C)  has no effect on total assets and total stockholders' equity.
D)  requires that a gain or loss be recognized on the income statement.E) None of the above
F) B) and C)

Question 11

Of the four dividends types, the two most common types in practice are

Accepted Answer

A)  cash and scrip.
B)  cash and property.
C)  cash and stock.
D)  property and stock.E) B) and D)
F) A) and B)

Question 12

Which of the following statements is not true about a 2-for-1 stock split?

Accepted Answer

A)  The market value of the stock will probably decrease.
B)  A stockholder with 5 shares before the split owns 10 shares after the split.
C)  Par value per share is reduced to half of what it was before the split.
D)  Total paid-in capital increases.E) B) and D)
F) A) and C)

Question 13

Outstanding stock of the Hall Corporation included 40,000 shares of $5 par common stock and 20,000 shares of 5%, $10 par non-cumulative preferred stock.In 2019, Hall declared and paid dividends of $8,000.In 2020, Hall declared and paid dividends of $24,000.How much of the 2020 dividend was distributed to preferred shareholders?

Accepted Answer

A)  $14,000.
B)  $18,000.
C)  $10,000.
D)  None of these answer choices are correct.E) None of the above
F) A) and B)

Question 14

Information that is not generally reported for each class of stock on the balance sheet is

Accepted Answer

A)  the market value.
B)  the par value.
C)  shares authorized.
D)  shares issued.E) All of the above
F) A) and B)

Question 15

The following information pertains to Benedict Company.Assume that all balance sheet amounts represent average balance figures.  What is the payout ratio for Benedict?

Accepted Answer

A)  48%
B)  20%
C)  28%
D)  5%E) B) and C)
F) A) and B)

Question 16

Nance Corporation's December 31, 2020 balance sheet showed the following:  Nance declared and paid a $85,000 cash dividend on December 15, 2020.If the company's dividends in arrears prior to that date were $24,000, Nance's common stockholders received

Accepted Answer

A)  $61,000.
B)  $48,000.
C)  $37,000.
D)  no dividend.E) B) and C)
F) None of the above

Question 17

The per share amount normally assigned by the board of directors to a large stock dividend is

Accepted Answer

A)  the market value of the stock on the date of declaration.
B)  the average price paid by stockholders on outstanding shares.
C)  the par or stated value of the stock.
D)  zero.E) A) and C)
F) B) and C)

Question 18

Which of the following would not affect the balance of the Retained Earnings account?

Accepted Answer

A)  Net income.
B)  Stock dividend.
C)  Stock split.
D)  Gains and losses of a company.E) A) and B)
F) C) and D)

Question 19

On January 1, Hamblin Corporation had 120,000 shares of $10 par value common stock outstanding.On March 17, the company declared a 10% stock dividend to stockholders of record on March 20.The market value of the stock was $13 on March 17.The stock was distributed on March 30.The entry to record the transaction of March 30 would include a

Accepted Answer

A)  credit to Cash for $120,000.
B)  debit to Common Stock Dividends Distributable for $120,000.
C)  credit to Paid-in Capital in Excess of Par Value for $36,000.
D)  debit to Stock Dividends for $36,000.E) C) and D)
F) A) and C)

Question 20

A corporate board of directors does not generally

Accepted Answer

A)  select officers.
B)  formulate operating policies.
C)  declare dividends.
D)  execute policy.E) A) and B)
F) A) and C)

Exam 11: Reporting and Analyzing Stockholders Equity

Of the four dividends types, the two most common types in practice are

Correct Answer
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The return on common stockholders' equity is computed by dividing net income

Correct Answer
verified

Information that is not generally reported for each class of stock on the balance sheet is

Correct Answer
verified

A corporate board of directors does not generally

Correct Answer
verified

What is the total stockholders' equity based on the following account balances?

Correct Answer
verified

Which of the following statements is not true about a 2-for-1 stock split?

Correct Answer
verified

The acquisition of treasury stock by a corporation

Correct Answer
verified

Nance Corporation's December 31, 2020 balance sheet showed the following: Nance declared and paid a $85,000 cash dividend on December 15, 2020.If the company's dividends in arrears prior to that date were $24,000, Nance's common stockholders received

Correct Answer
verified

The per share amount normally assigned by the board of directors to a large stock dividend is

Correct Answer
verified

Dividends in arrears are liabilities of the corporation.

Correct Answer
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The net effects on the corporation of the declaration and payment of a cash dividend are to

Correct Answer
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Correct Answer
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Correct Answer
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Par value

Correct Answer
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A stock split will

Correct Answer
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If common stock is issued for an amount greater than par value, the excess should be credited to

Correct Answer
verified

The board of directors of Benson Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2020.The dividend is to be paid on August 15, 2020, to stockholders of record on July 31, 2020.The correct entry to be recorded on August 15, 2020, will include a

Correct Answer
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Correct Answer
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The following information pertains to Benedict Company.Assume that all balance sheet amounts represent average balance figures. What is the payout ratio for Benedict?

Correct Answer
verified

Which of the following would not affect the balance of the Retained Earnings account?

Correct Answer
verified

Exam 11: Reporting and Analyzing Stockholders Equity

Of the four dividends types, the two most common types in practice are

Correct AnswerverifiedShow Answer

The return on common stockholders' equity is computed by dividing net income

Correct AnswerverifiedShow Answer

Information that is not generally reported for each class of stock on the balance sheet is

Correct AnswerverifiedShow Answer

A corporate board of directors does not generally

Correct AnswerverifiedShow Answer

What is the total stockholders' equity based on the following account balances?

Correct AnswerverifiedShow Answer

Which of the following statements is not true about a 2-for-1 stock split?

Correct AnswerverifiedShow Answer

The acquisition of treasury stock by a corporation

Correct AnswerverifiedShow Answer

Nance Corporation's December 31, 2020 balance sheet showed the following: Nance declared and paid a $85,000 cash dividend on December 15, 2020.If the company's dividends in arrears prior to that date were $24,000, Nance's common stockholders received

Correct AnswerverifiedShow Answer

The per share amount normally assigned by the board of directors to a large stock dividend is

Correct AnswerverifiedShow Answer

Dividends in arrears are liabilities of the corporation.

Correct AnswerverifiedShow Answer

The net effects on the corporation of the declaration and payment of a cash dividend are to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Par value

Correct AnswerverifiedShow Answer

A stock split will

Correct AnswerverifiedShow Answer

If common stock is issued for an amount greater than par value, the excess should be credited to

Correct AnswerverifiedShow Answer

The board of directors of Benson Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2020.The dividend is to be paid on August 15, 2020, to stockholders of record on July 31, 2020.The correct entry to be recorded on August 15, 2020, will include a

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The following information pertains to Benedict Company.Assume that all balance sheet amounts represent average balance figures. What is the payout ratio for Benedict?

Correct AnswerverifiedShow Answer

Which of the following would not affect the balance of the Retained Earnings account?

Correct AnswerverifiedShow Answer

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