Accounting Final

Issued shares represent what?

number of shares that the corporation has sold.

What is one of the elements of stockholders' equity?

retained earnings

What will be the increase in the Paid-in capital in excess of par account if a corporation issues 20,000 shares of $1.00 par common stock for $6 per share?

$100,000

Total stockholders' equity includes $50,000 of common stock with a stated value of $0.50, and 5,000 shares of treasury stock with a total cost of $25,000. How many total shares are outstanding?

95,000

Bonds are a popular source of financing because?

Bond interest expense is deductible for tax purposes, while dividends paid on stock are not

Why do many stockholders choose to invest in preferred stock?

dividends are distributed to preferred stockholders before common stockholders

Par value represents the what?

arbitrary amount that establishes a minimum price for the stock when it is first issued.

When a company purchases treasury stock, what is true?

The balances in the corporation's cash and retained earnings accounts

The balance in the retained earnings account represents what?

accumulated earnings that have not been distributed to stockholders.

Treasury shares represent the what?

number of previously issued shares that have been repurchased by the corporation

Outstanding shares represent what?

number of shares that are currently held by stockholders.

A convertible bond is one where.. ?

the bondholder can convert the bond into common stock at a future time

When a corporation decides whether to pay a cash dividend, which of the following is an important consideration?

The balances in the corporation's cash and retained earnings accounts

The total amount of interest that will be paid on a 5-year, $90,000 note payable at 11% simple annual interest is?

$49,500

A company's balance sheet showed the following amounts for liabilities and stockholders' equity accounts: Current Liabilities, $50,000; Bonds Payable, $600,000; Capital Lease Obligations, $120,000; and Deferred Income Tax Liability, $20,000. Total stockholders' equity was $520,000. What is the debt-to-equity ratio?

1.52

A company issued $10,000,000 of bonds. Assuming the most common denomination of bonds, the number of bonds sold was what?

10,000

Authorized stock represents the what?

maximum number of shares that can be issued for each class of stock

Long-term debt generally includes what?

obligations that extend beyond one year