2. Question : Stocks that pay relatively large cash dividends on a regular basis are called Student Answer: Small capital stocks Mid capital stocks Growth stocks Large capital stocks Income stocks3. Question : A corporation sold 14,000 shares of its $10 par value common stock at a cash price of $13 per share. The entry to record this transaction would include Student Answer: A debit to Contributed Capital in Excess of Par Value, Common Stock for $42,000 A debit to Cash for $140,000 A credit to Common Stock for $182,000 A credit to Common Stock for $140,000 A credit to Contributed Capital in Excess of Par Value, Common Stock for $182,0004. Question : A corporation’s distribution of additional shares of its own stock to its stockholders without the receipt of any payment in return is called a Student Answer: Stock dividend Stock subscription Premium on stock Discount on stock Treasury stock5. Question : Stockholders’ equity consists of Student Answer: Long-term assets Contributed capital and retained earnings Contributed capital and par value Retained earnings and cash Premiums and discounts6. Question : The statement of changes in stockholders’ equity Student Answer: Is part of the statement of retained earnings Shows only the ending balances in stockholders’ equity Describes changes in contributed capital and retained earnings subcategories Does not include changes in treasury stock Is reported by very few companies7. Question : A company issued 60 shares of $100 par value stock for $7,000 cash. The total amount of contributed capital is Student Answer: $100 $600 $1,000 $6,000 $7,0008. Question : Book value per share Student Answer: Reflects the value per share if a company is liquidated at balance sheet amounts Is assets divided by equity Is assets divided by the number of common shares outstanding Measures the worth of assets Is equal to par value per share9. Question : A company has a market value per share of $73.00. Its net income is $1,750,000 and the weighted-average number of shares outstanding is 350,000. The company’s price-earnings ratio equals Student Answer: 20.9 4.2 14.6 20.0 6.810. Question : A company’s board of directors votes to declare a total cash dividend of $25,000. The company has 2,500 shares of $1 par common stock and 400 shares of 4%, $200 par preferred stock outstanding. What is the total amount that will be paid to preferred shareholders? Student Answer: $1,000 $22,500 $400 $3,200 $25,00011. Question : A company paid $0.75 in cash dividends per share. Its earnings per share is $3.50 and its market price per share is $37.50. Its dividend yield equals Student Answer: 11.7% 2.0% 10.9% 21.4% 46.7%12. Question : A premium on common stock Student Answer: Is the amount paid in excess of par by purchasers of newly issued stock Is the difference between par value and issue price when the amount paid is below par Represents profit from issuing stock Represents capital gain on sale of stock Is prohibited in most states13. Question : A 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 300 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 Student Answer: A debit to Organization Expenses for $3,000 A debit to Organization Expenses for $5,000 A credit to Common Stock for $5,000 A credit to Contributed Capital in Excess of Par Value, Common Stock for $5,000 A debit to Contributed Capital in Excess of Par Value, Common Stock for $2,00014. Question : Retained earnings Student Answer: Generally consists of a company’s cumulative net income less any net losses and dividends declared since its inception Can only be appropriated by setting aside a cash fund Represent an amount of cash available to pay shareholders Are never adjusted for anything other than net income or dividends All of the above
papertowrite.com helps students cope with college assignments and write papers on a wide range of topics. We deal with academic writing, creative writing, and non-word assignments.