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BE 144 Identify which of the following items would be reported as additions (A) or deductions (D) in a Retained Earnings Statement. 1.Net Income 2.Net Loss 3.Cash Dividends 4. Stock Dividends 5. Prior period adjustments to correct for overstatement of prior years’ net income 6.Prior period adjustments to correct for understatement of prior years’ net income BE 145 The.
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MATCHING 199.Match the items below by entering the appropriate code letter in the space provided. A.Limited liabilityF.Preemptive right B.Capital stockG.Par value C.Board of directorsH.Legal capital D.Paid-in capitalI.Treasury stock E.Retained earningsJ.Cumulative feature ____              1.Net income retained in the corporation. ____              2.The amount that must be retained in the business for the protection of creditors. ____              3.Preferred stockholders have a right.
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Ex. 160 Wando Company reported retained earnings at December 31, 2016, of $410,000. Wando had 160,000 shares of common stock outstanding throughout 2017. The following transactions occurred during 2017. 1.An error was discovered in the 2015 accounting records, depreciation expense was recorded at $60,000, but the correct amount was $50,000. 2.A cash dividend of.
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91.The following selected amounts are available for Vizio Company. a.$1,300 b.$1,400 c.$900 d.$1,200 92.Kramer Co. had retained earnings of $30,000 on the balance sheet but disclosed in the footnotes that $6,000 of retained earnings was restricted for building expansion and $2,000 was restricted for bond repayments. Cash of $4,000 had been set aside for the.
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TRUE-FALSE STATEMENTS 1.Dividends may be declared and paid in cash or stock. 2.Cash dividends are not a liability of the corporation until they are declared by the board of directors. 3.The amount of a cash dividend liability is recorded on the date of record because it is on that date that the persons.
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59.If bonds can be converted into common stock, a.they will sell at a lower price than comparable bonds without a conversion feature. b.they will carry a higher interest rate than comparable bonds without the conversion feature. c.they will be converted only if the issuer calls them in for conversion. d.the bondholder may benefit if.
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Ex. 185 The following information is available for Mint Corporation: Common Stock ($10 par)$1,500,000 Paid-in Capital in Excess of Par—Preferred200,000 Paid-in Capital in Excess of Stated Value—Common750,000 Preferred Stock450,000 Retained Earnings800,000 Treasury Stock—Common50,000 Instructions Based on the preceding information, calculate each of the following: (a)Total paid-in capital. (b)Total stockholders' equity. Ex. 186 Place each of the items listed below in the appropriate subdivision.
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71.A stock split a.may occur in the absence of retained earnings. b.will increase total paid-in capital. c.will increase the total par value of the stock. d.will have no effect on the par value per share of stock. 72.The board of directors must assign a per share value to a stock dividend declared that is a.greater than.
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121.Each of the following statements is correct except that earnings per share is reported a.below net income. b.for both common and preferred stock. c.on the face of the income statement. d.based on the weighted-average number of common shares outstanding. 122.Blanco, Inc. has a net income of $300,000 for 2017, and there are 200,000 weighted-average shares.
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SHORT-ANSWER ESSAY QUESTIONS S-A E  183 The ultimate effect of incurring an expense is to reduce stockholders' equity. The declaration of a cash dividend also reduces stockholders' equity. Explain the difference between an expense and a cash dividend and explain why they have the same effect on stockholders' equity. S-A E  184 A large.
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51.Dividends Payable is classified as a a.long-term liability. b.contra stockholders' equity account to Retained Earnings. c.current liability. d.stockholders' equity account. 52.Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections: a.IncreaseDecreaseNo change b.No changeIncreaseDecrease c.DecreaseIncreaseDecrease d.DecreaseNo changeIncrease 53.Outstanding stock of the Larson Corporation included 40,000 shares of $5 par common stock and 10,000.
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S-A E  185 Why must a corporation have sufficient retained earnings before it may declare cash dividends? S-A E  186 Three dates are important in connection with cash dividends. Identify these dates, and explain their significance to the corporation and its stockholders. S-A E  187 Mike Mergenthaler asks, “Since stock dividends don't change anything, why.
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MULTIPLE CHOICE QUESTIONS 31.Each of the following decreases retained earnings except a a.cash dividend. b.liquidating dividend. c.stock dividend. d.All of these decrease retained earnings. 32.Each of the following decreases total stockholders' equity except a a.cash dividend. b.liquidating dividend. c.stock dividend. d.All of these decrease total stockholders' equity. 33.Which one of the following is not necessary in order for a corporation to.
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Ex. 163 The following accounts appear in the ledger of Rowlands Inc. after the books are closed at December 31, 2017. Common Stock, $1 par value, 500,000 shares authorized, 400,000 shares   issued$400,000 Common Stock Dividends Distributable60,000 Paid-in Capital in Excess of Par—Common Stock650,000 Preferred Stock, $100 par value, 6%, 10,000 shares authorized; 2,000 shares  .
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COMPLETION STATEMENTS               187.A corporation has a separate __________________________ apart from its owners.               188.The major advantages of the corporate form of organization include (1) limited _________________ of owners, (2) continuous ____________________ and (3) ease of transferring ___________________.               189.Stockholders elect the _______________, who in turn hire the ______________ of the company who.
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MULTIPLE CHOICE QUESTIONS 39.Each of the following is correct regarding bonds except they are a.a form of interest-bearing notes payable. b.attractive to many investors. c.issued by corporations and governmental agencies. d.sold in large denominations. 40.The contractual interest rate is always stated as a(n) a.monthly rate. b.daily rate. c.semiannual rate. d.annual rate. 41.When authorizing bonds to be issued, the board of directors.
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81.Which one of the following events would not require a formal journal entry on a corporation's books? a.2 for 1 stock split b.100% stock dividend c.2% stock dividend d.$1 per share cash dividend 82.Stock dividends and stock splits have the following effects on retained earnings: a.IncreaseNo change b.No changeDecrease c.DecreaseDecrease d.No changeNo change 83.The declaration and distribution of a stock.
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111.Assume that all balance sheet amounts for Carolina Company represent average balance figures. a.$1.90 b.$1.80 c.$1.20 d.$2.00 112.A corporation differs from a proprietorship and a partnership in that a.assets and liabilities are presented differently on the balance sheet. b.a corporation is considered a separate legal entity for taxation purposes. c.the historical cost principle only applies to proprietorships.
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MATCHING 182.Match the items below by entering the appropriate code letter in the space provided. A.Deficit F.Return on common stockholders’ equity B.Prior period adjustment G.Cash dividend C.Liquidating dividend H.Declaration date D.Retained earnings restrictions I.Stock dividend E.Earnings per share J.Stock split ____              1.A dividend declared out of paid-in capital. ____              2.Retained earnings currently unavailable for dividends. ____              3.The correction of.
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21.Earnings per share is calculated by dividing net income by the weighted-average number of shares of preferred stock and common stock outstanding. 22.Preferred dividends paid are added back to net income in calculating earnings per share for common stockholders. 23.Earnings per share indicates the net income earned by each share of outstanding.
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69.The total cost of borrowing is increased only if the a.bonds were issued at a premium. b.bonds were issued at a discount. c.bonds were sold at face value. d.market interest rate is less than the contractual interest rate on that date. 70.If the market interest rate is 5%, a $10,000, 6%, 10-year bond, that pays.
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S-A E  190(Communication) As part of a Careers in Accounting program sponsored by accounting organizations and supported by your company, you will be taking a group of high-school students through the accounting department in your company. You will also provide them with various materials to explain the work of an accountant..
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11.Retained earnings that are restricted are unavailable for dividends. 12.Restricted retained earnings are available for preferred stock dividends but unavailable for common stock dividends. 13.A retained earnings statement shows the same information as a corporation income statement. 14.A detailed stockholders' equity section in the balance sheet will list the names of individuals who.
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S-A E  206(Communication) As part of a Careers in Accounting program sponsored by accounting organizations and supported by your company, you will be taking a group of high school students through the accounting department in your company. You will also provide them with various materials to explain the work of an.
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79.In the balance sheet, the account, Premium on Bonds Payable, is a.added to bonds payable. b.deducted from bonds payable. c.classified as a stockholders' equity account. d.classified as a revenue account. 80.Four thousand bonds with a face value of $1,000 each, are sold at 105. The entry to record the issuance is a.Cash 4,200,000 b.Cash 4,000,000 c.Cash 4,200,000 d.Cash 4,200,000 81.Bond.
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Ex. 154 Juno Corporation's stockholders' equity section at December 31, 2016 appears below: Stockholders' equity Paid-in capital Common stock, $10 par, 60,000 outstanding$600,000 Paid-in capital in excess of par  150,000 Total paid-in capital$750,000 Retained earnings  150,000 Total stockholders' equity$900,000 On June 30, 2017, the board of directors of Juno Corporation declared a 20% stock dividend, payable on July 31,.
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Ex. 156 The following information is available for Blowing Rock Corporation: Common Stock ($5 par)$1,600,000 Retained Earnings1,200,000 An 18% stock dividend is declared and paid when the market value was $16 per share. Instructions Compute each of the following after the stock dividend. (a)Total stockholders' equity. (b)Number of shares outstanding. Ex. 157 Record the following transactions for Tri-State Corporation on.
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101.Retained earnings is increased by each of the following except a.net income. b.prior period adjustments. c.some disposals of treasury stock. d.All of these increase retained earnings. 102.A prior period adjustment for understatement of net income will a.be credited to the Retained Earnings account. b.be debited to the Retained Earnings account. c.show as a gain on the current year's.
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Ex. 167 The following information is available for Rubio Corporation for the year ended December 31, 2017: Sales revenue $900,000; Other revenues and gains $72,000; Operating expenses $110,000; Cost of goods sold $520,000; Other expenses and losses $32,000; Preferred stock dividends $30,000. The company's tax rate was 20%, and it had.
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Exercises Ex. 148 The stockholders' equity section of Echota Corporation at December 31, 2016, included the following: 5% preferred stock, $100 par value, cumulative, 10,000 shares authorized, 8,000 shares issued and outstanding........$   800,000 Common stock, $10 par value, 250,000 shares authorized, 200,000 shares issued and outstanding ..........................$2,000,000 Dividends were not declared on the preferred stock in.
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Ex. 182 Niley-Cook Corporation issued 200,000 shares of $20 par value, 6% preferred stock on January 1, 2015, for $4,500,000. In December 2017, Niley-Cook declared its first dividend of $800,000. Instructions (a)Prepare Niley-Cook’s journal entry to record the issuance of the preferred stock. (b)If the preferred stock is not cumulative, how much of the.
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S-A E  188 A prior period adjustment is occasionally reported in company financial statements. What is a prior period adjustment, and how is it reported in the financial statements? S-A E  189(Ethics) Jason Gorni, the president and CEO of Better Earth, Inc., a waste management firm, was recently hospitalized, suffering from exhaustion and.
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TRUE-FALSE STATEMENTS 1.Each bondholder may vote for the board of directors in proportion to the number of bonds held. 2.Bond interest paid by a corporation is an expense, whereas dividends paid are not an expense of the corporation. 3.Callable bonds are bonds that can be converted into common stock at the bondholder’s option. 4.A.
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Ex. 169 Santos Corporation gathered the following information for the fiscal year ended December 31, 2017: Sales$1,500,000 Operating expenses160,000 Cost of goods sold960,000 Loss on disposal of equipment40,000 Santos Corporation is subject to a 30% income tax rate. Instructions Prepare a partial income statement, beginning with income from operations. Ex. 170 At December 31, 2017, Florrict Company has $500,000 of.
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COMPLETION STATEMENTS 172.Three important dates associated with dividends are the: (1)__________________, (2)__________________, and (3)__________________. 173.The entry to record the declaration of a stock dividend increases _______________, and decreases ________________. 174.Both a stock split and a stock dividend will _________________ the number of shares outstanding and have _________________ on total stockholders' equity. 175.Corporations sometimes segregate.
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Ex. 150 On January 1, 2017, Triad Corporation had 60,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred: Mar.1Issued 25,000 shares of common stock for $550,000. June1Declared a cash dividend of $2.00 per share to stockholders of record on June 15. June30Paid the $2.00 cash.
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49.Bonds that are subject to retirement at a stated dollar amount prior to maturity at the option of the issuer are called a.callable bonds. b.early retirement bonds. c.options. d.debentures. 50.Bonds that have specific assets of the issuer pledged as collateral are a.secured bonds. b.callable bonds. c.convertible bonds. d.debenture bonds. 51.A bond secured by specific assets set aside to redeem the.
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61.Sebastiani Inc. declared a $80,000 cash dividend. It currently has 3,000 shares of 7%, $100 par value cumulative preferred stock outstanding. It is one year in arrears on its preferred stock. How much cash will Sebastiani distribute to the common stockholders? a.$38,000. b.$42,000. c.$59,000. d.None of these answer choices are correct. 62.On December 31, 2017,.
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Ex. 158 The following information is available for Xavier Corporation: Retained Earnings, December 31, 2016$1,500,000 Net Income for the year ended December 31, 2017$   200,000 The company accountant, in preparing financial statements for the year ending December 31, 2017, has discovered the following information: The company's previous bookkeeper, who has been fired, had recorded depreciation.
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Ex. 162 On January 1, 2017, Lundy Corporation had Retained Earnings of $400,000. During the year, Lundy had the following selected transactions: 1.Declared stock dividends of $50,000. 2.Declared cash dividends of $90,000. 3.A 2 for 1 stock split involving the issuance of 200,000 shares of $5 par value common stock for 100,000 shares of.
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Ex. 164 The following information is available for Richmond Hill Corporation: Beginning common stockholders' equity$700,000 Dividends paid to common stockholders50,000 Dividends paid to preferred stockholders30,000 Ending common stockholders' equity1,000,000 Net income200,000 Instructions Based on the preceding information, calculate return on common stockholders' equity. Ex. 165 In 2017, Spanish Fort Corporation had net sales of $500,000 and cost of goods sold.
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S-A E  205(Ethics) Rob Rote, the president and CEO of RRR Waste Management, was recently hospitalized, suffering from exhaustion and a heart ailment. Immediately prior to his hospitalization, RRR had experienced a sharp decline in its stock price, and trading activity became almost nonexistent. The primary reason for this was concern.
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