99)
Mayan Company had net income of $132,000. The weighted-average common shares outstanding
were 80,000. The company declared a $27,000 dividend on its noncumulative, nonparticipating
preferred stock. There were no other stock transactions. The company’s earnings per share is:
A) $4.89. B) $1.31. C) $1.65. D) $1.99. E) $0.34.
100)
The price-earnings ratio is calculated by dividing:
A)
Dividends per share by market value per share.
B)
Market value per share by earnings per share.
C)
Dividends per share by earnings per share.
D)
Earnings per share by market value per share.
E)
Market value per share by dividends per share.
101)
A company has net income of $90,000; its weighted-average common shares outstanding are
18,000. Its dividend per share is $0.45, its market price per share is $88, and its book value per
share is $76. Its price-earnings ratio equals:
A) 12.5. B) 17.6. C) 15.2. D) 9.0. E) 16.9.
102)
A company has earnings per share of $9.60. Its dividend per share is $0.50, its market price per
share is $110, and its book value per share is $96. Its price-earnings ratio equals:
A) 19.2. B) 10.0. C) 1.15. D) 11.46. E) 0.87.
103)
The amount of annual cash dividends distributed to common shareholders relative to the common
stock’s market value is the:
A)
Current yield.
B)
Earnings per share.
C)
Dividend yield.
D)
Dividend payout ratio.
E)
Price-earnings ratio.
104)
The dividend yield is computed by dividing:
A)
Market price per share by cash dividends per share.
B)
Annual cash dividends per share by the market value per share.
C)
Annual cash dividends per share by earnings per share.
D)
Earnings per share by cash dividends per share.
E)
Cash dividends per share by retained earnings.
105)
Stocks that pay relatively large cash dividends on a regular basis are called:
A)
Large capital stocks.
B)
Small capital stocks.
C)
Mid capital stocks.
D)
Income stocks.
E)
Growth stocks.
106)
Dividend yield is the percent of cash dividends paid to common shareholders relative to the:
A)
Investors’ purchase price of the stock.
B)
Earnings per share.
C)
Amount of cash.
D)
Common stock’s market value.
E)
Amount of retained earnings.
107)
A company paid $0.48 in cash dividends per share. Its earnings per share is $3.20 and its market
price per share is $20.00. Its dividend yield equals:
A) 6.4%. B) 6.25%. C) 15.00%. D) 6.67%. E) 2.4%.
108)
A company paid $0.85 in cash dividends per share. Its earnings per share is $3.50, and its market
price per share is $35.50. Its dividend yield equals:
A) 21.4%. B) 2.4%. C) 9.9%. D) 24.2%. E) 2.0%.
109)
Book value per share:
A)
Measures the worth of assets.
B)
Is assets divided by the number of common shares outstanding.
C)
Is equal to par value per share.
D)
Reflects the value per share if a company is liquidated at balance sheet amounts.
E)
Is assets divided by equity.
110)
Book value per common share is computed by:
A)
Dividing the number of common shares outstanding by stockholders’ equity applicable to
common shares.
B)
Dividing total assets by the number of shares outstanding.
C)
Dividing stockholders’ equity applicable to common shares by the number of common shares
outstanding.
D)
Multiplying the number of common shares outstanding times the market price per common
share.
E)
Multiplying the number of common shares outstanding by par value per share.
111)
A company has 50,000 shares of common stock outstanding. The stockholders’ equity applicable to
common shares is $1,470,000, and the par value per common share is $5. The book value per share
is:
A) $4.75. B) $47.50. C) $10.00. D) $29.40. E) $14.70.
112)
Wiggins Company has 1,000 shares of $10 par preferred stock, which were issued at par. It also
has 25,000 shares of common stock outstanding, and its total stockholders’ equity equals $500,000.
The book value per common share is:
A) $19.60. B) $10.00. C) $16.00. D) $20.00. E) $19.96.
113)
Djarleen Company has 10,000 shares of $10 par preferred stock, which were issued at par. It also
has 250,000 shares of common stock outstanding, and its total stockholders’ equity equals
$4,000,000. The book value per common share is:
A) $10.00. B) $40.00. C) $15.60. D) $16.67. E) $16.00.
114)
A company has 500 shares of $50 par value preferred stock outstanding, and the call price of its
preferred stock is $60 per share. It also has 20,000 shares of common stock outstanding, and the
total value of its stockholders’ equity is $680,000. The company’s book value per common share
equals:
A) $31.71. B) $33.17. C) $32.50. D) $60.00. E) $32.75.
115)
The Discount on Common Stock account reflects:
A)
An amount of assets defined by state law that stockholders must invest and leave invested in a
corporation.
B)
One share’s portion of the issued corporation’s net assets recorded in its accounts.
C)
The difference between the par value of the stock and the amount paid-in by stockholders
when the amount paid-in is more than par value.
D)
The difference between the par value of stock and its issue price when it is issued at a price
below par value.
E)
The amount a corporation must pay in addition to dividends in arrears if and when it exercises
its right to retire a share of callable preferred stock.
116)
Percy Corporation was formed on January 1. The corporate charter authorized 100,000 shares of
$10 par value common stock. During the first month of operation, the corporation issued 400
shares to its attorneys in payment of a $5,000 charge for drawing up the articles of incorporation.
The entry to record this transaction would include:
A)
A debit to Organization Expenses for $5,000.
B)
A debit to Paid–in Capital in Excess of Par Value, Common Stock for $2,000.
C)
A credit to Paid–in Capital in Excess of Par Value, Common Stock for $5,000.
D)
A debit to Organization Expenses for $4,000.
E)
A credit to Common Stock for $5,000.
117)
A corporation sold 14,000 shares of its $1 par value common stock at a cash price of $13 per share.
The entry to record this transaction would include:
A)
A debit to Paid-in Capital in Excess of Par Value, Common Stock for $182,000.
B)
A credit to Paid–in Capital in Excess of Par Value, Common Stock for $196,000.
C)
A debit to Cash for $14,000.
D)
A credit to Common Stock for $14,000.
E)
A credit to Common Stock for $182,000.
118)
Comfort Mattresses, Inc. sold 26,000 shares of its $1 par value common stock at a cash price of
$12 per share. The entry to record this transaction would be:
A)
Debit Cash $312,000; credit Stock Liability $286,000; credit Common Stock $26,000.
B)
Debit Common Stock $26,000; credit Cash $26,000.
C)
Debit Cash $312,000; credit Common Stock $26,000; credit Paid-in Capital in Excess of Par
Value, Common Stock $286,000.
D)
Debit Common Stock $26,000; debit Paid-in Capital in Excess of Par Value, Common Stock
$286,000; credit Cash $312,000.
E)
Debit Cash for $312,000; credit Common Stock $312,000.
119)
A corporation issued 6,000 shares of its $2 par value common stock in exchange for land that has a
market value of $84,000. The entry to record this transaction would include:
A)
A credit to Paid-in Capital in Excess of Par Value, Common Stock for $72,000.
B)
A credit to Common Stock for $84,000.
C)
A debit to Common Stock for $12,000.
D)
A debit to Land for $12,000.
E)
A credit to Land for $12,000.
120)
A corporation issued 100 shares of its $5 par value common stock in payment of a $1,800 charge
from its accountant for assistance in filing its charter with the state. The entry to record this
transaction will include:
A)
A $1,800 credit to Common Stock.
B)
A $1,800 debit to Legal Expenses.
C)
A $1,800 credit to Cash.
D)
A $1,300 credit to Paid–in Capital in Excess of Par Value, Common Stock.
E)
A $300 debit to Organization Expenses.
121)
A company issued 60 shares of $100 par value common stock for $7,000 cash. The total amount of
paid-in capital is:
A) $600. B) $100. C) $6,000. D) $7,000. E) $1,000.
122)
A company issued 60 shares of $100 par value common stock for $7,000 cash. The journal entry to
record the issuance is:
A)
Debit Cash $7,000; credit Common Stock $6,000; credit Paid-in Capital in Excess of Par
Value, Common Stock $1,000.
B)
Debit Cash $7,000; credit Common Stock $7,000.
C)
Debit Cash $7,000; credit Paid-in Capital in Excess of Par Value, Common Stock $6,000,
credit Common Stock $1,000.
D)
Debit Investment in Common Stock $7,000; credit Cash $7,000.
E)
Debit Common Stock $6,000, debit Investment in Common Stock $1,000; credit Cash
$7,000.
123)
A company issued 70 shares of $30 par value preferred stock for $4,000 cash. The journal entry to
record the issuance is:
A)
Debit Cash $4,000; credit Preferred Stock $4,000.
B)
Debit Cash $2,100; credit Preferred Stock $2,100.
C)
Debit Preferred Stock $2,100, debit Investment in Preferred Stock $1,900; credit Cash
$4,000.
D)
Debit Cash $4,000; credit Paid-in Capital in Excess of Par Value, Preferred Stock $1,900,
credit Preferred Stock $2,100.
E)
Debit Investment in Preferred Stock $2,100; credit Cash $2,100.
124)
A company issued 60 shares of $100 par value common stock for $7,000 cash. The total amount of
paid-in capital in excess of par is:
A) $600. B) $7,000. C) $100. D) $6,000. E) $1,000.
125)
A corporation issued 5,000 shares of $10 par value common stock in exchange for some land with
a market value of $70,000. The entry to record this exchange is:
A)
Debit Land $50,000; credit Common Stock $50,000.
B)
Debit Common Stock $50,000; debit Paid-In Capital in Excess of Par Value, Common Stock
$20,000; credit Land $70,000.
C)
Debit Common Stock $70,000; credit Land $70,000.
D)
Debit Land $70,000; credit Common Stock $50,000; credit Paid-In Capital in Excess of Par
Value, Common Stock $20,000.
E)
Debit Land $70,000; credit Common Stock $70,000.
126)
A premium on common stock:
A)
Represents profit from issuing stock.
B)
Is prohibited in most states.
C)
Occurs when a corporation sells its stock for more than par or stated value.
D)
Represents capital gain on sale of stock.
E)
Is the difference between par value and issue price when the amount paid is below par.
127)
The date the directors vote to declare and pay a dividend is called the:
A)
Date of declaration.
B)
Date of payment.
C)
Date of stockholders’ meeting.
D)
Date of record.
E)
Liquidating date.
128)
A liquidating dividend is:
A)
Only declared when a corporation closes down.
B)
A return of a portion of the original investment back to the stockholders.
C)
Only paid in shares of stock.
D)
Only paid in assets other than cash.
E)
Not allowed under federal law.
129)
A liability for dividends exists:
A)
On the date of payment.
B)
When cumulative preferred stock is sold.
C)
On the date of record.
D)
For dividends in arrears on cumulative preferred stock.
E)
On the date of declaration.
130)
A company’s board of directors votes to declare a cash dividend of $.75 per share of common
stock. The company has 15,000 shares authorized, 10,000 issued, and 9,500 shares outstanding.
The total amount of the cash dividend is:
A) $7,500. B) $11,250. C) $14,625. D) $10,250. E) $7,125.