ac quiz 11
a corporate charcter specifies that the company may sell up to 20 million shares of stock. the company sells 12 million shares to investors and later buys back 3 million shares. the current number of outsatnding shares after these transactions have been accounted for is
9 million shares
Assume that Dawg Company originally issued 1,000 shares of $10 par value common stock for $30,000 ($30 per share). Dawg subsequently purchases 100 shares of treasury stock for $27 per share and resells the 100 shares of treasury stock for $29 per share. In the entry to record the reissuance (resale) of the treasury stock, there will be a A. $200 credit to Additional Paid-In Capital. B. $2,700 credit to Common Stock. C. $3,000 debit to Additional Paid-In Capital. D. $200 credit to Gain on Sale. E. $1,000 credit to Treasury Stock.
A. $200 credit to Additional Paid-In Capital.
A corporate charter specifies that the company may sell up to 20 million shares of stock. The company sells 12 million shares to investors and later buys back 3 million shares. The number of issued shares after these transactions have been accounted for is: A. 12 million shares. B. 9 million shares. C. 10 million shares. D. 17 million shares.
A. 12 million shares.
. Which of the following statements is true? A. Preferred stock is generally classified as stockholders' equity. B. The market value of stock is the par value of the stock. C. Treasury stock is an asset account. D. The authorized number of shares of stock is the total number of shares of stock issued and outstanding. E. None of the above is true; all are false statements.
A. Preferred stock is generally classified as stockholders' equity.
2. Which of the following represents the largest number of common shares? A. Treasury shares B. Issued shares C. Outstanding shares D. Authorized shares E. Market shares
D. Authorized shares
8. Which of the following is true? A. Retained earnings are subtracted from paid-in capital to arrive at total stockholders' equity. B. The acquisition of treasury stock by a corporation increases total assets and total stockholders' equity. C. Treasury stock is a contra-asset account. D. Dividends become a liability when declared by the board of directors. E. None of the above; all of the statements above are false.
D. Dividends become a liability when declared by the board of directors
3. Which of the following statements would NOT explain why a company may want to repurchase its stock? A. To demonstrate to investors that it believes its own stock is worth purchasing. B. To obtain shares to reissue to employees as part of an employee stock plan. C. To obtain shares that can be reissued as payment for purchase of another company. D. To increase the number of shares of outstanding stock
D. To increase the number of shares of outstanding stock
4. If a company issues 1,000 shares of $1 par value common stock for $20 per share, what would be the effect on the accounting equation? a. Increase assets and increase liabilities. b. Increase assets and increase revenue. c. Increase assets and increase stockholders' equity. d. Increase assets and decrease stockholders' equity.
c. Increase assets and increase stockholders' equity.
Outstanding common stock refers to the total number of shares: a. Issued. b. Issued plus treasury stock. c. Issued less treasury stock. d. Authorized. e. Authorized less treasury stock.
c. Issued less treasury stock
south beach apparel issued 17,000 shares of $4 par value for $20 per share. What is the journal entry to record the issuance?
credit additional paid-in-capital $272,000
if a corporation declares and distributes a 10% stock dividend on its common stock, the account debited is: a) dividends payable b) common stock c) share capital d) reatained earnings
d) reatained earnings
2. Coleman Corp. reacquired 1,200 shares of its $3 par value common stock for $29 each on November 6. On November 22, Coleman Corp. reissued 800 shares for $32 each. Which of the following is correct regarding the effect of the journal entry for the reissued shares on November 22? a. Liabilities decrease b. Expenses increase c. Assets decrease d. Contributed Capital increases e. Revenue increases
d. Contributed Capital increases
a company sells 1 million shares of stock with no par value for $15 a share. in recording the transaction, it would
debit cash and credit common stock for 15 million
the combined effect of the declaration and payment of a cash dividends on a company's financial staments is to:
decades total assets and decrease stockholders equity
a corporation declared and issues at 15% stock dividends on November 1. Prior to the dividends, the balance in retained earnings was $850,000, the number of shares of $5 par value stock issued and outsnading was 60,000, and the market value of the stock was $12. the amount of the change in total SE' as a result of recording this stock dividends is:
$0
a company recording net income of $5.6 million. at the beginning of the year, 3.4 million shares of common stock were outstanding while during the year the average number of shares outstanding was 3.5 million. there were 400,000 shares of preffered stock outstanding on avaerga and no divends were declared. the EPS is appraximately?
$1.60
X-Co issued 1,000 shares of its 5%, $100 par value, cumulative preferred stock for $100 cash per share. The journal entry to record this event includes a ______________.
-$100,000 debit to Cash -$100,000 credit to Preferred Stock
5. A current dividend preference means that: A. preferred stockholders are paid current dividends before common stockholders are paid dividends. B. unpaid dividends to preferred stockholders accumulate and must be paid before common stockholders receive dividends. C. preferred stockholders are paid their full fixed dividend rate each period as long as the company is in operation. D. unpaid cash dividends to preferred stockholders must be replaced with stock dividends during the current period.
A. preferred stockholders are paid current dividends before common stockholders are paid dividends.
7. Cole Corporation issues 10,000 shares of $50 par value common stock for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $600,000 and a credit or credits to A. Common Stock for $600,000. B. Common Stock for $500,000 and Additional Paid-in Capital for $100,000. C. Common Stock for $500,000 and Retained Earnings for $100,000. D. Additional Paid-in Capital for $600,000. E. Treasury Stock for $500,000.
B. Common Stock for $500,000 and Additional Paid-in Capital for $100,000.
6. A company would not acquire treasury stock A. in order to reissue shares to officers as compensation. B. to increase the outstanding number of shares in the market. C. in order to increase trading of the company's stock. D. to have additional shares available to use in acquisitions of other companies.
B. to increase the outstanding number of shares in the market.
Par value of a stock refers to the A. issue price of the stock B. value assigned to a share of stock in the corporate charter. C. market value of the stock. D. maximum selling price of the stock.
B. value assigned to a share of stock in the corporate charter.
Typically, all other things equal, a profitable company that pays little or no dividends: A. is a bad investment. B. will reinvest profits which can lead to greater growth potential. C. will experience relatively stable stock prices over time. D. will appeal to investors who desire distributions of profit.
B. will reinvest profits which can lead to greater growth potential.
3. Trailhead Inc.'s December 31, 2013 trial balance includes the following balances: Common Stock, $14,000; Additional Paid in Capital, $36,000, Retained Earnings, $32,000; Treasury Stock, $3,200; Bonds Payable $3,200. Total stockholders' equity at December 31, 2013 is A. $46,800 B. $50,000 C. $78,800 D. $85,200 E. $82,000
C. $78,800
if Frankentein company issues 1,000 shares of $5 par value common stock for $70,000 A. Common Stock will be credited for $70,000. B. Additional Paid-In Capital will be credited for $5,000. C. Additional Paid-In Capital will be credited for $65,000. D. Cash will be debited for $65,000. E. Retained Earnings will be credited for $70,000.
C. Additional Paid-In Capital will be credited for $65,000.
A company sells 1 million shares of common stock with a par value of $0.02 for $15 a share. To record the transaction, the company would: A. debit Cash for $20,000 and credit Common Stock for $20,000. B. debit Cash for $15 million and credit Common Stock for $15 million. C. debit Cash for $15 million, credit Common Stock for $20,000 and credit Additional Paid-in Capital for $14,980,000. D. debit Cash for $20,000, debit Capital Receivable for $14,980,000, credit Common Stock for $20,000 and credit Additional Paid-in Capital for $14,980,000.
C. debit Cash for $15 million, credit Common Stock for $20,000 and credit Additional Paid-in Capital for $14,980,000.
5. Theolonius Inc. purchased 1,000 shares of treasury stock for $12 per share. This transaction A. decreases common stock authorized by 1,000 shares. B. decreases common stock issued by 1,000 shares. C. decreases common stock outstanding by 1,000 shares. D. has no effect on the number of shares of common stock outstanding.
C. decreases common stock outstanding by 1,000 shares.
4. Reeves Company originally issued 1,000 shares of $10 par value common stock for $30,000 ($30 per share). Reeves subsequently purchases 100 shares of treasury stock for $27 per share and resells the 100 shares of treasury stock for $29 per share. In the entry to record the reissuance (resale) of the treasury stock, there will be a A. credit to Common Stock for $2,700. B. credit to Treasury Stock for $1,000. C. debit to Additional Paid-In Capital for $3,000. D. credit to Additional Paid-In Capital for $200. E. credit to Gain on Sale for $200.
D. credit to Additional Paid-In Capital for $200.
3. Big Bang Inc. purchased 3,000 shares of treasury stock for $9 per share. This transaction A. decreases common stock authorized by 3,000 shares. B. decreases common stock issued by 3,000 shares. C. has no effect on the number of shares of common stock outstanding. D. decreases common stock outstanding by 3,000 shares.
D. decreases common stock outstanding by 3,000 shares.
Reginald Corporation issues 10,000 shares of $50 par value common stock for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $600,000 and a credit or credits to A. Retained Earnings for $100,000 and Common Stock for $500,000. B. Additional Paid-in Capital for $600,000. C. Common Stock for $600,000. D. Treasury Stock for $500,000. E. Additional Paid-in Capital for $100,000 and Common Stock for $500,000.
E. Additional Paid-in Capital for $100,000 and Common Stock for $500,000.
If Goblin Company issues 1,000 shares of $5 par value common stock for $70,000, the journal entry to record this transaction will include a: A. credit to Additional Paid-In Capital for $5,000. B. credit to Common Stock for $70,000. C. debit to Cash for $65,000. D. credit to Retained Earnings for $70,000. E. credit to Additional Paid-In Capital for $65,000.
E. credit to Additional Paid-In Capital for $65,000.
which of the following statements regarding treasury stock is true? a) when a company reissues treasury stock for more than it orginally paid for the stock, it does not report a gain. b) it increases SE when a company purchases treasure stock or pays a divdend c) treasury stock is reported as an asset on the balance sheet d) is reported as issues and outstanding stock
a) when a company reissues treasury stock for more than it orginally paid for the stock, it does not report a gain.
6. Treasury Stock is normally reported as: a. A reduction of total stockholders' equity. b. An addition to total stockholder's equity. c. An asset account. d. A liability account. e. An expense account.
a. A reduction of total stockholders' equity
7. Which of the following statements is false? a. Authorized stock is the number of shares that have been sold to investors. b. Outstanding stock is the number of shares held by investors. c. Par value is the legal capital per share of stock that's assigned when the corporation is first established. d. Treasury stock is the repurchase of a company's own issued stock. e. A company credits Additional Paid-in Capital for the portion of the cash proceeds above par value received for the issuance of stock.
a. Authorized stock is the number of shares that have been sold to investors.
3. Capstone Inc.'s board of directors declared a $.40 per share cash dividend on its $2 par common stock. On the date of declaration, there were 44,000 shares authorized, 16,000 shares issued, and 7,000 shares held as treasury stock. What is the entry for the dividend declaration? a. Dividends Declared 3,600 Dividends Payable 3,600 b. Dividends Declared 17,600 Dividends Payable 17,600 c. Dividends Declared 3,600 Cash 3,600 d. Dividends Declared 6,400 Cash 6,400
a. Dividends Declared 3,600 Dividends Payable 3,600
which of the following statements regarding a stock split is true? a) a stock split decreases retained earnings b) stock splits do not require a journal entry c) stock splits are the same as stock divideds d) stock splits increase the par value per share
b) stock splits do not require a journal entry
8. Buckhead Inc.'s December 31, 2014 trial balance includes the following balances: Common stock, $14,000; Paid in Capital in Excess of Par, $36,000, Retained Earnings, $32,000; and Treasury stock, $3,200. Total stockholders' equity at December 31, 2014 is a. $46,800 b. $50,000 c. $78,800 d. $85,200
c. $78,800
