Question 1

The ability of a corporation to obtain capital is

Accepted Answer

A)  enhanced because of limited liability and ease of share transferability.
B)  less than a partnership.
C)  restricted because of the limited life of the corporation.
D)  about the same as a partnership.

Question 2

Outstanding stock of the West Corporation included 40,000 shares of $5 par common stock and 10,000 shares of 5%, $10 par non-cumulative preferred stock.In 2019, West declared and paid dividends of $4,000.In 2020, West declared and paid dividends of $20,000.How much of the 2020 dividend was distributed to preferred shareholders?

Accepted Answer

A)  $9,000.
B)  $15,000.
C)  $5,000.
D)  None of these answer choices are correct.

Question 3

From the information below, compute the payout ratio for Kevin's Trailers.

Accepted Answer

A)  20%.
B)  16%.
C)  8%.
D)  4%.

Question 4

When stock dividends are distributed,

Accepted Answer

A)  Common Stock Dividends Distributable is decreased.
B)  Retained earnings is decreased.
C)  Paid-in Capital in Excess of Par Value is debited if it is a small stock dividend.
D)  No entry is necessary if it is a large stock dividend.

Question 5

The effect of a stock dividend is to

Accepted Answer

A)  decrease total assets and stockholders' equity.
B)  change the composition of stockholders' equity.
C)  decrease total assets and total liabilities.
D)  increase the book value per share of common stock.

Question 6

The following data is available for BOX Corporation at December 31, 2020:  Based on the data, how many shares of common stock are outstanding?

Accepted Answer

A)  30,000.
B)  27,000.
C)  29,920.
D)  26,920.

Question 7

When retained earnings are restricted, total retained earnings

Accepted Answer

A)  are unaffected.
B)  increase.
C)  decrease.
D)  may increase or decrease.

Question 8

Which of the following would not be true of a privately held corporation?

Accepted Answer

A)  It is sometimes called a closely held corporation.
B)  Its shares are regularly traded on the New York Stock Exchange.
C)  It does not offer its shares for sale to the general public.
D)  It is usually smaller than a publicly held company.

Question 9

The number of shares of issued stock equals

Accepted Answer

A)  unissued shares minus outstanding shares.
B)  outstanding shares plus treasury shares.
C)  authorized shares minus treasury shares.
D)  outstanding shares plus authorized shares.

Question 10

Racer Corporation's December 31, 2020 balance sheet showed the following:  Racer's total paid-in capital was

Accepted Answer

A)  $63,580,000.
B)  $64,420,000.
C)  $62,740,000.
D)  $36,080,000.

Question 11

The amount of a cash dividend liability is recorded on the date of record because it is on that date that the persons or entities who will receive the dividend are identified.

Accepted Answer

A) True 
 B)False

Question 12

What is the total stockholders' equity based on the following account balances?

Accepted Answer

A)  $1,000,000.
B)  $975,000.
C)  $1,150,000.
D)  $800,000.

Question 13

Common Stock Dividends Distributable is classified as a(n)

Accepted Answer

A)  asset account.
B)  stockholders' equity account.
C)  expense account.
D)  liability account.

Question 14

In published annual reports,

Accepted Answer

A)  subclassifications within the stockholders' equity section are routinely reported in detail.
B)  capital surplus is used in place of retained earnings.
C)  the individual sources of additional paid-in capital are often combined.
D)  retained earnings is often not shown separately.

Question 15

Sizemore, Inc.has 10,000 shares of 4%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2020.If the board of directors declares a $25,000 dividend, the

Accepted Answer

A)  preferred stockholders will receive 1/10th of what the common stockholders will receive.
B)  preferred stockholders will receive the entire $25,000.
C)  $25,000 will be held as restricted retained earnings and paid out at some future date.
D)  preferred stockholders will receive $12,500 and the common stockholders will receive $12,500.

Question 16

If a corporation declares a 10% stock dividend on its common stock, the account to be debited on the date of declaration is

Accepted Answer

A)  Common Stock Dividends Distributable.
B)  Common Stock.
C)  Paid-in Capital in Excess of Par.
D)  Stock Dividends.

Question 17

Ferman Corporation had net income of $140,000 and paid dividends of $40,000 to common stockholders and $20,000 to preferred stockholders in 2020.Ferman Corporation's common stockholders' equity at the beginning and end of 2020 was $870,000 and $1,130,000, respectively.Ferman Corporation's return on common stockholders' equity was

Accepted Answer

A)  14%.
B)  12%.
C)  9%.
D)  8%.

Question 18

Which of the following statements about dividends is not accurate?

Accepted Answer

A)  Dividends are generally reported quarterly as a dollar amount per share.
B)  Low dividends may mean high stock returns.
C)  The board of directors is obligated to declare dividends.
D)  Payment of dividends from legal capital is illegal in many states.

Question 19

Which of the following show the proper effect of a stock split and a stock dividend?

Accepted Answer

The answer of Which of the following show the proper...

Question 20

On January 1, Hamblin Corporation had 120,000 shares of $10 par value common stock outstanding.On March 17, the company declared a 10% stock dividend to stockholders of record on March 20.The market value of the stock was $13 on March 17.The entry to record the transaction of March 17 would include a

Accepted Answer

A)  credit to Stock Dividends for $36,000.
B)  credit to Cash for $156,000.
C)  credit to Common Stock Dividends Distributable for $120,000.
D)  debit to Common Stock Dividends Distributable for $120,000.

Exam 11: Reporting and Analyzing Stockholders Equity

The number of shares of issued stock equals

Correct Answer
verified

The effect of a stock dividend is to

Correct Answer
verified

If a corporation declares a 10% stock dividend on its common stock, the account to be debited on the date of declaration is

Correct Answer
verified

Sizemore, Inc.has 10,000 shares of 4%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2020.If the board of directors declares a $25,000 dividend, the

Correct Answer
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The ability of a corporation to obtain capital is

Correct Answer
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Which of the following statements about dividends is not accurate?

Correct Answer
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Correct Answer
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Racer Corporation's December 31, 2020 balance sheet showed the following: Racer's total paid-in capital was

Correct Answer
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From the information below, compute the payout ratio for Kevin's Trailers.

Correct Answer
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Common Stock Dividends Distributable is classified as a(n)

Correct Answer
verified

The amount of a cash dividend liability is recorded on the date of record because it is on that date that the persons or entities who will receive the dividend are identified.

Correct Answer
verified

When stock dividends are distributed,

Correct Answer
verified

The following data is available for BOX Corporation at December 31, 2020: Based on the data, how many shares of common stock are outstanding?

Correct Answer
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Correct Answer
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In published annual reports,

Correct Answer
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What is the total stockholders' equity based on the following account balances?

Correct Answer
verified

Which of the following would not be true of a privately held corporation?

Correct Answer
verified

When retained earnings are restricted, total retained earnings

Correct Answer
verified

Which of the following show the proper effect of a stock split and a stock dividend?

Correct Answer
verified

Correct Answer
verified

Exam 11: Reporting and Analyzing Stockholders Equity

The number of shares of issued stock equals

Correct AnswerverifiedShow Answer

The effect of a stock dividend is to

Correct AnswerverifiedShow Answer

If a corporation declares a 10% stock dividend on its common stock, the account to be debited on the date of declaration is

Correct AnswerverifiedShow Answer

Sizemore, Inc.has 10,000 shares of 4%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2020.If the board of directors declares a $25,000 dividend, the

Correct AnswerverifiedShow Answer

The ability of a corporation to obtain capital is

Correct AnswerverifiedShow Answer

Which of the following statements about dividends is not accurate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Racer Corporation's December 31, 2020 balance sheet showed the following: Racer's total paid-in capital was

Correct AnswerverifiedShow Answer

From the information below, compute the payout ratio for Kevin's Trailers.

Correct AnswerverifiedShow Answer

Common Stock Dividends Distributable is classified as a(n)

Correct AnswerverifiedShow Answer

The amount of a cash dividend liability is recorded on the date of record because it is on that date that the persons or entities who will receive the dividend are identified.

Correct AnswerverifiedShow Answer

When stock dividends are distributed,

Correct AnswerverifiedShow Answer

The following data is available for BOX Corporation at December 31, 2020: Based on the data, how many shares of common stock are outstanding?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In published annual reports,

Correct AnswerverifiedShow Answer

What is the total stockholders' equity based on the following account balances?

Correct AnswerverifiedShow Answer

Which of the following would not be true of a privately held corporation?

Correct AnswerverifiedShow Answer

When retained earnings are restricted, total retained earnings

Correct AnswerverifiedShow Answer

Which of the following show the proper effect of a stock split and a stock dividend?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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