ACCT Test 3 Textbook Questions

Assuming that the preferred stock is cumulative with no dividends in arrears, what total dollar amount of preferred dividends needs to be declared at December 31, before the common stockholders may receive a dividend?

(% PS) x (PV x Issued Shares)

Apolo Company reported year-end current assets of $75,000 and current liabilities of $25,000. The company's current ratio is

3

Cristo Company reported net income of $50,000 after subtracting $10,000 for interest expense and $20,000 for taxes. Compute the company's times-interest-earned ratio

8

Wyler Company issued 20,000 shares of $10 par value common stock in exchange for a building with a current fair value of $1,000,000. In recording this transaction, what amount should be credited to the Paid-in Capital in Excess of Par Value account?

800,000 1,000,000 - (20,000 x 10$)

Which type of stock may have dividends in arrears?

Cumulative preferred stock

In financial statement presentations, the Discount on Bonds Payable account is

Deducted From Bonds Payable

What is the usual liability of stockholders for corporation actions

Limited to the amount of their investment in the corporation

An example of off-balance-sheet financing is a

Operating Lease