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Exam 11: Corporate Reporting and Analysis

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Question 31

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The term restricted retained earnings refers to statutory but not contractual restrictions.

A) True
B) False

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Question 32

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A company made an error in recording the Year 1 purchase of computer equipment as an expense.This was discovered in Year 2.The item should be reported as a prior period adjustment on the Year 2 income statement.

A) True
B) False

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Question 33

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A company paid a cash dividend of $0.88 per share during the current year,and reported 18,000 shares of common stock issued,and 2,000 common shares in treasury stock during the current year.The year-end market price per share was $27.50.Calculate the following: (1)total amount of cash dividends paid to common shareholders,and (2)dividend yield.

Torino Company has 10,000 shares of $5 par value,4% cumulative and nonparticipating preferred stock and 100,000 shares of $10 par value common stock outstanding.The company paid total cash dividends of $1,000 in its first year of operation.The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:

A corporation issued 100 shares of its $5 par value common stock in payment of a $1,800 charge from its accountant for assistance in filing its charter with the state.The entry to record this transaction will include:

Dividend yield shows the annual amount of cash dividends distributed to common shares relative to the stock's market price.

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 dividend declaration is:

Ultimate Sportswear has $100,000 of 8% noncumulative,nonparticipating,preferred stock outstanding.Ultimate Sportswear also has $500,000 of common stock outstanding.In the company's first year of operation,no dividends were paid.During the second year,the company paid cash dividends of $30,000.This dividend should be distributed as follows:

The costs of bringing a corporation into existence,including legal fees and promoter fees,are called:

A company reports the following stockholders' equity: Paid-in Capital: Compute the (1)number of common shares outstanding and (2)book value per common share.

The least amount that the buyers of stock must contribute to the corporation or be at risk to pay creditors at a future date is called ________.

A corporation issued 5,000 shares of $10 par value common stock in exchange for some land with a market value of $70,000.The entry to record this exchange is:

The main limitation in using book value per share for stock valuation models is the potential difference between recorded value and market value for both assets and liabilities.

Retained earnings generally consists of a company's cumulative net income less any net losses and dividends declared.

Declaration of a stock dividend results in a liability being recorded.

A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share.The entry to record this transaction would be:

When a corporation has only one class of stock,the stock is called:

The Paid-in Capital,Treasury Stock account can have a zero or credit balance.

A liability for dividends exists:

Beagle Company earned $90,000 in income and paid cash dividends of $7,000 to preferred shareholders during the current year.Beagle had 15,500 weighted-average shares of common stock outstanding for the year.Calculate the company's earnings per share.