ACG Chapters 9,10,11

a

10) The major parts of the Stockholders' Equity section of the Balance Sheet are: A) Paid-In Capital and Retained Earnings. B) Stock and Retained Earnings. C) Stock, Paid-In Capital and Retained Earnings. D) Authorized Stock and Preferred Stock.

a

Plymouth Corporation's net income for the current year is $360,000. The corporation had outstanding 6,000 shares of 10%, $100 par value nonconvertible preferred stock and 25,000 shares of $10 par value common stock. No shares were issued or retired during the year. What is the earnings per share of the company? A) $12.00. B) $13.67 C) $14.40 D) $1.44

a

Purchases of long-term assets are reported in which section of the statement of cash flows? A. Investing activities B. Operating activities C. Financing activities D. All of the above

e

The declaration of a stock dividend: A) increases a liability. B) decreases an asset. C) increases an expense. D) increases retained earnings E) does not affect total stockholder's equity

b

The disclosure of a contingent liability only in the footnotes designates that the possibility of an actual obligation occurring is: A) remote. B) possible. C) probable. D) certain.

B

8. Anew Health Care Company reports net income of $200,000 and Depreciation Expense of $20,000 for the year ending December 31, 2015. No long-term assets were sold or exchanged during 2015. They also have the following data available: December 31, 2014, 2015 Current Assets: Cash $30,000 ,$80,000 Accounts Receivable 160,000, 100,000 Inventory 95,000 , 60,000 Prepaid Rent 5,000 ,10,000 Total Current Assets $290,000, $250,000 Current Liabilities: Accounts Payable $50,000 , $40,000 Salaries Payable 40,000, 90,000 Total Current Liabilities $90,000, $130,000 Using the indirect method, what is the net cash provided (or used) from operating activities for the year ending December 31, 2015? A. $70,000 B. $90,000 C. $120,000 D. $190,000

b

Illusions Corp. issues 5,000 shares of $20 par common stock for $28 per share. The amount credited to paid-in capital in excess of par is: A) $100,000. B) $40,000. C) $6,000. D) $140,000.

c

In which section of the statement of cash flows would "payment of dividends" be reported? A. Investing activities B. Operating activities C. Financing activities D. None of the above

a

Kahn Corporation issued 100,000 shares of $1 par common stock at a price of $10 per share. On June 1, Kahn purchased 2,000 shares of its own stock at a cost of $14 per share. On December 1, Kahn resold all the 2,000 treasury shares for $16 each. The entry on December 1 would include which of these? A)Credit to Paid-in Capital from Treasury Stock, $4,000. B)Credit to Treasury Stock, $32,000. C)Credit to Gain on the Sale of Treasury Stock, $4,000. D)Debit to Cash, $28,000.

c

Stock that is held by stockholders is called: A) issued stock. B) authorized stock. C) outstanding stock. D) open stock. E) common stock

b

Stonework Company's outstanding stock is 100 shares of $100, 6% cumulative preferred stock and 2,000 shares of $10 par common stock. Stonework paid $2,000 in cash dividends including one-year dividends in arrears to preferred stockholders. Common stockholders received: A) $1,818. B) $800. C) $600. D) $0. ** annual perferred dividend

d

The MNO corporation purchased a large machine 6 years ago at a total cost of $300,000. The accumulated depreciation on this machine is $180,000. The corporation sold the machine at a $30,000 loss. What amount would be reported as cash proceeds from this sale? A. $30,000 B. $270,000 C. $150,000 D. $90,000

a

The Webster Company had $800,000 of sales revenue. During the same accounting period the beginning and ending accounts receivable balance was $37,000 and $39,000, respectively. What amount of cash was collected from the customers during this period? A. $798,000 B. $800,000 C. $802,000 D. $839,000

d

When using the indirect method, what should be subtracted from net income in determining net cash flow from operating activities? A. Gain on sale of long-term assets B. Decrease in accounts payable C. Depreciation expense D. Both A and B

b

Which of the following dates do NOT require a journal entry? A) Date of payment B) Date of record C) Date of declaration D) All dividend dates require a journal entry.

c

Which of the following does not have an effect on cash? A. payment of a declared cash dividend. B. issuance of long-term debt. C. recording depletion expense. D. None of the above

b

Which of the following is NOT an advantage of a corporation? A) Ease of raising capital B) Government regulation C) Limited liability D) Transfer of ownership

d

Which of the following is TRUE regarding treasury stock? A) Treasury Stock has a debit balance. B) Treasury Stock is a contra-asset account. C) Treasury Stock is recorded at cost. D) Both A and C are true of Treasury Stock. (recorded at cost and debit balance)

b

Which of the following is an advantage of a corporation? A) Double taxation B) Continuous life C) Unlimited liability D) Non-transfer of ownership E) Lower costs

a

Which of the following is included in the calculation of cash receipts from investing activities? A. Proceeds from the sale of long-term investments B. Loaning money to another business C. Purchase of plant assets D. Proceeds from the sale of treasury stock

d

Which of the following items are not included in determining the cash payments (outflows) from financing activities? A. Repaying a long-term note payable B. Purchasing treasury stock C. Retiring bonds payable D. Acquisition of plant assets