Question 1

The account Paid-In Capital from Treasury Stock Transactions has a credit balance of $2,000.The corporation resells 450 shares of its treasury stock.These shares were acquired for $10 per share and sold for $3 per share.The entry to record the sale of treasury stock includes a debit to Retained Earnings of $3,150.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following items are NOT reported after income from continuing operations?

Accepted Answer

A)  earnings per share
B)  gross profit
C)  discontinued operations
D)  net incomeE) A) and B)
F) C) and D)

Question 3

Treasury stock is a contra equity account.

Accepted Answer

A) True 
 B)False

Question 4

The par value of a stock has no relation to the market value.

Accepted Answer

A) True 
 B)False

Question 5

Treasury stock ________.

Accepted Answer

A)  decreases the number of shares issued
B)  increases the number of shares issued
C)  increases the number of shares outstanding
D)  decreases the number of shares outstandingE) C) and D)
F) A) and B)

Question 6

Restrictions on retained earnings are ________.

Accepted Answer

A)  reported on the statement of cash flows
B)  usually reported in the notes to the financial statements
C)  reported on the income statement
D)  designed to maximize dividends paid to shareholdersE) C) and D)
F) B) and D)

Question 7

Earnings per share for income from continuing operations must be reported on the face of the income statement.

Accepted Answer

A) True 
 B)False

Question 8

When stock is issued for assets other than cash,the transaction is always recorded at the market value of the stock issued.

Accepted Answer

A) True 
 B)False

Question 9

Cash dividends and treasury stock purchases ________.

Accepted Answer

A)  represent cash payments that are made to ensure higher reported profits
B)  may be limited by creditors to ensure that the company maintains a minimum level of stockholders' equity
C)  may be restricted as a way to lower federal income tax expense
D)  make more resources available to pay liabilitiesE) B) and C)
F) A) and B)

Question 10

These independent companies had the following transactions:
a.Long Corporation issued 4,500 shares of its $6 stated value common stock to Jack Smith Realty in exchange for land with a market value of $50,000
b.Short Corporation received $115,000 cash for 10,000 shares of its $10 par preferred stock
c.Middle Corporation issued 7,000 shares of its no-par common stock at $15 per share
Requirement:
Prepare the journal entries for these transactions.Use proper account titles and omit explanations.

Accepted Answer

The answer of These independent companies had the following transactions:
a.Long...

Question 11

Accounting for stated value common stock is identical to accounting for par value stock.

Accepted Answer

A) True 
 B)False

Question 12

On June 30,2018,Padres,Inc.showed the following data on the equity section of their balance sheet:

On July 1,2018,the company declared and distributed a 10% stock dividend.The market value of the stock at that time was $15 per share.Following this transaction,what is the number of shares issued?

Accepted Answer

A)  86,500
B)  297,300
C)  160,600
D)  146,000E) All of the above
F) B) and C)

Question 13

Companies usually report their retained earnings restrictions on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following corporate characteristics is a disadvantage of a corporation?

Accepted Answer

A)  Stockholders have limited liability.
B)  A corporation has a continuous life.
C)  There is no mutual agency between the stockholders and the corporation.
D)  Earnings of a corporation may be subject to double taxation.E) None of the above
F) A) and B)

Question 15

Stated value stock is no-par stock that has been assigned an amount similar to par value.

Accepted Answer

A) True 
 B)False

Question 16

List the four basic rights of stockholders.

Accepted Answer

1.Participate in management by voting on...

Question 17

Treasury stock is ________.

Accepted Answer

A)  a contra equity account
B)  a contra asset account
C)  a liability account
D)  an asset accountE) A) and D)
F) B) and C)

Question 18

When a corporation issues no-par stock,it debits the asset received and credits the stock account.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements regarding the price/earnings ratio is incorrect?

Accepted Answer

A)  The price/earnings ratio represents the market price of one share of common stock.
B)  A price/earnings ratio of 9.2 implies that the company's stock is selling at 9.2 times one year's earnings per share.
C)  A higher price/earnings ratio signifies a higher return on investment.
D)  The price/earnings ratio is most useful when comparing one company to another.E) A) and B)
F) B) and C)

Question 20

A higher price/earnings ratio signifies a higher return on investment.

Accepted Answer

A) True 
 B)False

Exam 13: Stockholders Equity

Accounting for stated value common stock is identical to accounting for par value stock.

Correct Answer
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Correct Answer
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Stated value stock is no-par stock that has been assigned an amount similar to par value.

Correct Answer
verified

Cash dividends and treasury stock purchases ________.

Correct Answer
verified

When stock is issued for assets other than cash,the transaction is always recorded at the market value of the stock issued.

Correct Answer
verified

On June 30,2018,Padres,Inc.showed the following data on the equity section of their balance sheet: On July 1,2018,the company declared and distributed a 10% stock dividend.The market value of the stock at that time was $15 per share.Following this transaction,what is the number of shares issued?

Correct Answer
verified

When a corporation issues no-par stock,it debits the asset received and credits the stock account.

Correct Answer
verified

List the four basic rights of stockholders.

Correct Answer
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1.Participate in management by voting on...
View Answer

Treasury stock is a contra equity account.

Correct Answer
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Treasury stock ________.

Correct Answer
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Which of the following corporate characteristics is a disadvantage of a corporation?

Correct Answer
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Treasury stock is ________.

Correct Answer
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Earnings per share for income from continuing operations must be reported on the face of the income statement.

Correct Answer
verified

Correct Answer
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The par value of a stock has no relation to the market value.

Correct Answer
verified

Companies usually report their retained earnings restrictions on the balance sheet.

Correct Answer
verified

A higher price/earnings ratio signifies a higher return on investment.

Correct Answer
verified

Which of the following items are NOT reported after income from continuing operations?

Correct Answer
verified

Restrictions on retained earnings are ________.

Correct Answer
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Which of the following statements regarding the price/earnings ratio is incorrect?

Correct Answer
verified

Exam 13: Stockholders Equity

Accounting for stated value common stock is identical to accounting for par value stock.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Stated value stock is no-par stock that has been assigned an amount similar to par value.

Correct AnswerverifiedShow Answer

Cash dividends and treasury stock purchases ________.

Correct AnswerverifiedShow Answer

When stock is issued for assets other than cash,the transaction is always recorded at the market value of the stock issued.

Correct AnswerverifiedShow Answer

On June 30,2018,Padres,Inc.showed the following data on the equity section of their balance sheet: On July 1,2018,the company declared and distributed a 10% stock dividend.The market value of the stock at that time was $15 per share.Following this transaction,what is the number of shares issued?

Correct AnswerverifiedShow Answer

When a corporation issues no-par stock,it debits the asset received and credits the stock account.

Correct AnswerverifiedShow Answer

List the four basic rights of stockholders.

Correct Answerverified1.Participate in management by voting on...View AnswerShow Answer

Treasury stock is a contra equity account.

Correct AnswerverifiedShow Answer

Treasury stock ________.

Correct AnswerverifiedShow Answer

Which of the following corporate characteristics is a disadvantage of a corporation?

Correct AnswerverifiedShow Answer

Treasury stock is ________.

Correct AnswerverifiedShow Answer

Earnings per share for income from continuing operations must be reported on the face of the income statement.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The par value of a stock has no relation to the market value.

Correct AnswerverifiedShow Answer

Companies usually report their retained earnings restrictions on the balance sheet.

Correct AnswerverifiedShow Answer

A higher price/earnings ratio signifies a higher return on investment.

Correct AnswerverifiedShow Answer

Which of the following items are NOT reported after income from continuing operations?

Correct AnswerverifiedShow Answer

Restrictions on retained earnings are ________.

Correct AnswerverifiedShow Answer

Which of the following statements regarding the price/earnings ratio is incorrect?

Correct AnswerverifiedShow Answer

Correct Answer
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1.Participate in management by voting on...
View Answer

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