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In 2018, Brock Lee Vegetables, issued $1 par value common stock for $30 per share. No other common stock transactions occurred until March 31, 2020, when Brock Lee acquired some of the issued shares for $25 per share and retired them. Which of the following statements is true for this acquisition and retirement?


A) 2020 net income is decreased.
B) 2020 net income is increased.
C) Additional paid-in capital is increased.
D) Retained earnings is increased.

E) C) and D)
F) B) and D)

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When stock is issued for consideration other than cash, what is the measurement objective?

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The measurement objective is that the tr...

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When a company issues a stock dividend, which of the following would be affected?


A) Earnings per share.
B) Total assets.
C) Total liabilities.
D) Total shareholders' equity.

E) None of the above
F) A) and B)

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The changes in account balances for Elder Company for 2018 are as follows: The changes in account balances for Elder Company for 2018 are as follows: Assuming the only changes in retained earnings in 2018 were for net income and a $50,000 dividend, what was net income for 2018? A) $40,000. B) $60,000. C) $70,000. D) $90,000. Assuming the only changes in retained earnings in 2018 were for net income and a $50,000 dividend, what was net income for 2018?


A) $40,000.
B) $60,000.
C) $70,000.
D) $90,000.

E) B) and D)
F) All of the above

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Paid-in capital must consist solely of amounts invested by shareholders.

A) True
B) False

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In 2018, Southwestern Corporation completed the treasury stock transactions listed below. In 2018, Southwestern Corporation completed the treasury stock transactions listed below. Southwestern had issued 100,000 shares of its $1 par common stock for $10 several months ago. Required: Prepare the journal entries to record the above transactions, using the cost method. Southwestern had issued 100,000 shares of its $1 par common stock for $10 several months ago. Required: Prepare the journal entries to record the above transactions, using the cost method.

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Stock designated as preferred usually has preferential rights over other classes of stock relative to dividends and liquidating distributions.

A) True
B) False

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A new CEO was hired to revive the floundering Heirloom Watch Corporation. The company had endured operating losses for several years, but confidence was emerging that better times were ahead. The board of directors and shareholders approved a quasi-reorganization for the corporation. The reorganization included devaluing inventory for obsolescence by $210 million and increasing land by $10 million. Immediately before the restatement, at December 31, 2018, Heirloom Watch Corporation's balance sheet appeared as follows (in condensed form): A new CEO was hired to revive the floundering Heirloom Watch Corporation. The company had endured operating losses for several years, but confidence was emerging that better times were ahead. The board of directors and shareholders approved a quasi-reorganization for the corporation. The reorganization included devaluing inventory for obsolescence by $210 million and increasing land by $10 million. Immediately before the restatement, at December 31, 2018, Heirloom Watch Corporation's balance sheet appeared as follows (in condensed form): Required: 1. Prepare the journal entries appropriate to record the quasi-reorganization on January 1, 2019. 2. Prepare a balance sheet as it would appear immediately after the restatement. Required: 1. Prepare the journal entries appropriate to record the quasi-reorganization on January 1, 2019. 2. Prepare a balance sheet as it would appear immediately after the restatement.

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Olsson Corporation received a check from its underwriters for $72 million. This was for the issue of one million of its $5 par stock that the underwriters expect to sell for $72 per share. Which is the correct entry to record the issue of the stock?


A) Olsson Corporation received a check from its underwriters for $72 million. This was for the issue of one million of its $5 par stock that the underwriters expect to sell for $72 per share. Which is the correct entry to record the issue of the stock? A) B) \begin{array}{|l|r|r|} \hline \text { Cash } & 72,000,000 & \\ \hline \text { Deferred stock issue revenue } & & 20,000,000 \\ \hline \text { Common stock } & & 5,000,000 \\ \hline \text { Paid-in capital\_excess of par } & & 47,000,000 \\ \hline \end{array} C) \begin{array}{|l|l|l|} \hline \text { Cash } & 72,000,000 & \\ \hline \text { Common stock } & & 72,000,000 \\ \hline \end{array} D) \begin{array}{|l|r|r|} \hline \text { Cash } & 72,000,000 & \\ \hline \text { Common stock } & & 5,000,000 \\ \hline \text { Paid-in capital\_excess of par } & & 67,000,000 \\ \hline \end{array}
B)  Cash 72,000,000 Deferred stock issue revenue 20,000,000 Common stock 5,000,000 Paid-in capital_excess of par 47,000,000\begin{array}{|l|r|r|}\hline \text { Cash } & 72,000,000 & \\\hline \text { Deferred stock issue revenue } & & 20,000,000 \\\hline \text { Common stock } & & 5,000,000 \\\hline \text { Paid-in capital\_excess of par } & & 47,000,000 \\\hline\end{array}
C)  Cash 72,000,000 Common stock 72,000,000\begin{array}{|l|l|l|}\hline \text { Cash } & 72,000,000 & \\\hline \text { Common stock } & & 72,000,000 \\\hline\end{array}
D)  Cash 72,000,000 Common stock 5,000,000 Paid-in capital_excess of par 67,000,000\begin{array}{|l|r|r|}\hline \text { Cash } & 72,000,000 & \\\hline \text { Common stock } & & 5,000,000 \\\hline \text { Paid-in capital\_excess of par } & & 67,000,000 \\\hline\end{array}

E) B) and C)
F) A) and C)

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Pug Corporation has 10,000 shares of $10 par common stock outstanding and 20,000 shares of $100 par, 6% noncumulative, nonparticipating preferred stock outstanding. Dividends have not been paid for the past two years. This year, a $150,000 dividend will be paid. What are the dividends per share for preferred and common, respectively?


A) $7.50; $0.
B) $6; $3.
C) $6; $1.50.
D) None of these answer choices are correct.

E) B) and D)
F) None of the above

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The shareholders' equity of Crystal Company includes the items shown below. The board of directors of Crystal declared cash dividends of $3 million, $6 million, and $50 million in each of its first three years of operation: 2016, 2017, and 2018, respectively. Common stock, $1 par, 50,000,000 shares outstanding Preferred stock, 6%, $100 par, 1,000,000 shares outstanding Required: Determine the amount of dividends per share on preferred and common stock for each of the three years. The preferred stock is cumulative and nonparticipating.

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($ in millions, except per share amounts...

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The corporate charter of Alpaca Co. authorized the issuance of 10 million, $1 par common shares. During 2018, its first year of operations, Alpaca had the following transactions: The corporate charter of Alpaca Co. authorized the issuance of 10 million, $1 par common shares. During 2018, its first year of operations, Alpaca had the following transactions: What amount should Alpaca report as additional paid-in capital? excess of par, in its December 31, 2018, balance sheet? A) $122 million B) $116 million C) $112 million D) $74 million What amount should Alpaca report as additional paid-in capital? excess of par, in its December 31, 2018, balance sheet?


A) $122 million
B) $116 million
C) $112 million
D) $74 million

E) A) and B)
F) B) and D)

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Heidi Aurora Imports issued shares of the company's Class B stock. Heidi Aurora Imports should report the stock in the company's statement of financial position:


A) Among liabilities if the shares are mandatorily redeemable or redeemable at the option of the shareholder.
B) As equity unless the shares are mandatorily redeemable.
C) As equity unless the shares are redeemable at the option of the issuer.
D) Among liabilities unless the shares are mandatorily redeemable.

E) A) and B)
F) C) and D)

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The retained earnings balance reported in the balance sheet typically is not affected by:


A) Net income.
B) A prior period adjustment.
C) Dividends paid.
D) Restrictions.

E) All of the above
F) B) and D)

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In 2016, Winn, Inc., issued $1 par common stock for $35 per share. No other common stock transactions occurred until July 31, 2018, when Winn acquired some of the issued shares for $30 per share and retired them. Which of the following statements correctly states an effect of this acquisition and retirement?


A) 2018 net income is decreased.
B) Additional paid-in capital is decreased.
C) 2018 net income is increased.
D) Retained earnings is increased.

E) A) and D)
F) All of the above

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R Co. has outstanding 100 million shares, $1 par common stock, selling for $8 per share. After a 1 for 4 reverse stock split:


A) R would have 25 million shares, $4 par per share.
B) The market price per share would be about $2.
C) Fractional shares would be issued.
D) Retained earnings would be reduced.

E) B) and C)
F) A) and D)

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Accumulated other comprehensive income is reported:


A) In the balance sheet as an asset.
B) In the balance sheet as a liability.
C) In the balance sheet as a component of shareholders' equity.
D) In the statement of comprehensive income.

E) A) and B)
F) A) and C)

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The shareholders' equity of Tru Corporation includes $600,000 of $1 par common stock and $1,200,000 par of 6% cumulative preferred stock. The board of directors of Tru declared cash dividends of $150,000 in 2018 after paying $60,000 cash dividends in each of 2017 and 2016. Required: What is the amount of dividends common shareholders will receive in 2018?

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Tru's common shareholders will receive d...

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When a company issues a stock dividend of any size, which of the following would be affected?


A) Earnings per share.
B) Total stockholders' equity.
C) Total liabilities.
D) Total assets.

E) A) and B)
F) A) and C)

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Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Restriction of retained earnings


A) Similar to an S corporation, but no limit on number of owners.
B) Net income as a percentage of average book value.
C) Paid-in capital and/or retained earnings affected when sold.
D) Preferred practice is to disclose in the notes to the financial statements.
E) Used in evaluating stock performance.

F) A) and B)
G) C) and E)

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Showing 101 - 120 of 179

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