88.
A 2-for-1 stock split:
89.
When a stock dividend is declared, total stockholders’ equity will:
90.
A liquidating dividend:
91.
At the beginning of the current year, Elite Corporation had 200,000 shares of $1 par
common stock outstanding and had retained earnings of $4,800,000. During the year, the
company earned $1,675,000, declared a 10% stock dividend when the price of stock was
$28 per share, and paid a year-end cash dividend of $3 per share. (The cash dividend was
paid after the stock dividend had been distributed.) What was Elite Corporation’s retained
earnings at the end of the year?
92.
At the beginning of the current year, Wilson Corporation had 200,000 shares of $1 par
common stock outstanding and had retained earnings of $4,800,000. During the year, the
company earned $1,675,000 and paid a year-end cash dividend of $3 per share. What was
Wilson Corporation’s retained earnings at the end of the year?
93.
On January 31, Village Bank had 500,000 shares of $3 par value common stock outstanding.
On that date, the company declared a 10% stock dividend when the market price of the
stock was $62 per share. The immediate effect of this dividend upon Village Bank was:
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94.
Which of the following items would
not
reduce retained earnings?
The stockholders’ equity section of the balance sheet of Caesar Corporation at December
31, 2015, appears as follows: (The company engaged in no treasury stock transactions
prior to 2015)
95.
Refer to the information above. What was the original cost of the treasury stock to Caesar
Corporation?
96.
Refer to the information above. What was the average issue price per share of preferred
stock?
97.
Refer to the information above. How many shares of common stock are outstanding?
98.
Refer to the information above. A small stock dividend of 1,000 shares was declared and
distributed during 2015. What was the market price per share on the date of declaration?
99.
Refer to the information above. If Caesar Corporation had reacquired 7,000 shares of
treasury stock early in 2015, then some treasury stock must have been sold during 2015
for:
100.
Refer to the information above. Assume that all remaining treasury stock is reissued at a
price of $14 per share in January of 2016. What amount should be credited to the account
Additional Paid-In Capital: Treasury Stock Transactions in the journal entry to record this
transaction?
The stockholders’ equity section of the balance sheet of Crammond Corporation at
December 31, appears as follows:
101.
Refer to the information above. What was the average issue price per share of preferred
stock?
102.
Refer to the information above. How many shares of common stock are outstanding?
103.
A restriction of retained earnings:
104.
A company failed to make an adjusting entry in the prior year to accrue earned revenue. To
correct this they should:
105.
A prior period adjustment is a correction made to:
106.
If a material accounting error was made in a prior year, that error:
107.
Which of the following would be treated as a prior period adjustment by Gold Corporation
in 2015?
108.
A prior period adjustment appears in:
109.
After preparing the financial statements for 2015, the accountant for the Dawson
Corporation discovered that a prior period adjustment had been omitted from the 2013
financial statements. Which of the following is most likely to require correction as a result
of this oversight?
110.
A prior period adjustment appears in the financial statements of the current year when:
111.
Comprehensive income can be displayed to users of financial statements in which of the
following way(s):
112.
Which of the following items would be included in comprehensive income but
not
reported
as a component of net income?
113.
Treasury stock appears as:
12–55
114.
The statement of stockholders’ equity:
115.
A statement of stockholders’ equity discloses each of the following
except
:
Essay Questions
116.
Accounting terminology
Listed below are nine technical accounting terms introduced in this chapter:
Each of the following statements may (or may not) describe one of these technical terms.
In the space provided beside each statement, indicate the accounting term described, or
answer “None” if the statement does not correctly describe any of the terms.
____ (a) A financial statement showing the revenue, expenses, and net earnings of a
corporation during the current accounting period.
____ (b) A distribution of cash to stockholders.
____ (c) A distribution to stockholders of additional shares of stock, accompanied by a
proportionate reduction in the par value per share.
____ (d) The market price of a share of preferred stock, divided by the net income of the
corporation.
____ (e) A correction in the amount of net income reported in an earlier accounting period.
____ (f) An event that is material in dollar amount, unusual in nature, and not expected to
recur in the foreseeable future.
____ (g) A subtotal sometimes included in an income statement to assist investors in
forecasting the income of future accounting periods.
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117.
Discontinued operations
The operations of Global Entertainment, Inc., for the current year are summarized below:
Global Entertainment had 400,000 shares of capital stock outstanding. Complete the
following condensed income statement for the year, including the appropriate earnings per
share figures.
118.
Income statement and earnings per share
Shown below is information relating to operations of Broadway Industries for 2015:
In the space provided, complete the income statement for Broadway Industries, including
earnings per share figures. Broadway Industries has 100,000 shares of a single class of
common stock outstanding throughout the year.