Strayer ACC 557 Week 8 Chapter 11 Quiz
This Tutorial contains All possible Questions from this chapter
Question no 1
Ranier Company is authorized to issue 10,000 shares of 8%, $100 par value preferred stock and 500,000 shares of no-par common stock with a stated value of $1 per share. If Ranier issues 5,000 shares of preferred stock for land with an asking price of $600,000 and a market value of $540,000, which of the following would be the journal entry for Ranier to record?
- Land 540,000
Preferred Stock 540,000 - Land 540,000
Preferred Stock 500,000
Paid-in Capital Excess of Par-Preferred 40,000 - Land 500,000
Preferred Stock 500,000 - Land 600,000
Preferred Stock 500,000
Paid-in Capital in Excess of Par-Preferred 100,000
Question no 2
Aim, Inc., has 10,000 shares of 5%, $100 par value, noncumulative preferred stock and 40,000 shares of $1 par value common stock outstanding at December 31, 2013. There were no dividends declared in 2012. The board of directors declares and pays a $120,000 dividend in 2013. What is the amount of dividends received by the common stockholders in 2013?
- $0
- $50,000
- $70,000
- $20,000
Question no 3
A net loss
- occurs if operating expenses exceed cost of goods sold.
- is closed to Retained Earnings even if it would result in a debit balance.
- is closed to the paid-in capital account of the stockholders’ equity section of the balance sheet.
- is not closed to Retained Earnings if it would result in a debit balance.
Question no
Hsu, Inc. issued 7,500 shares of stock at a stated value of $8/share. The total issue of stock sold for $15 per share. The journal entry to record this transaction would include a
- debit to Cash for $60,000.
- credit to Common Stock for $60,000.
- credit to Common Stock for $112,500.
- credit to Paid-in Capital in Excess of Par for $112,500.
Question no 5
The per share amount normally assigned by the board of directors to a large stock dividend is
- the average price paid by stockholders on outstanding shares.
- the par or stated value of the stock.
- zero.
- the market value of the stock on the date of declaration.
Question no 6
IFRS treats the purchase of treasury stock as any of the following except
- a decrease to retained earnings.
- an increase to a contra equity account.
- a decrease to share premium.
- a decrease to share capital.
Question no 7
Additional paid-in capital includes all of the following except the amounts paid in
- for the par value of common stock.
- over par value.
- over stated value.
- from treasury stock.
Question no 8
Stockholders of a corporation directly elect
- the treasurer of the corporation.
- all of the employees of the corporation.
- the president of the corporation.
- the board of directors
STATUS
Question no 9
Which of the following is not a right or preference associated with preferred stock?
- Preference for corporate assets in case of liquidation
- The right to vote
- To receive dividends in arrears before common stockholders receive dividends
- First claim to dividends
Question no 10
Restricting retained earnings for the cost of treasury stock purchased is a
- legal restriction.
- stock restriction.
- voluntary restriction.
- contractual restriction.
Question no 11
A company would not acquire treasury stock
- in order to reissue shares to officers.
- as an asset investment.
- in order to increase trading of the company’s stock.
- to have additional shares available to use in acquisitions of other companies.
Question no 12
Brown Company has 1,000 shares of 6%, $100 par cumulative preferred stock outstanding at December 31, 2013. No dividends have been paid on this stock for 2012 or 2013. Dividends in arrears at December 31, 2013 total
- $0.
- $600.
- $6,000.
- $12,000.
Question no 13
If stock is issued for less than par value, the account
- Paid-In Capital in Excess of Par is debited if a debit balance exists in the account.
- Paid-In Capital in Excess of Par is debited if a credit balance exists in the account.
- Paid-In Capital in Excess of Par is credited.
- Retained Earnings is credited.
Question no 14
When stock is issued for legal services, the transaction is recorded by debiting Organization Expense for the
- par value of the stock.
- market value of the stock.
- book value of the stock.
- stated value of the stock.
Question no 15
Win, Inc. has 10,000 shares of 7%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2013. If the board of directors declares a $60,000 dividend, the $60,000 will be held as restricted retained earnings and paid out at some future date.
- preferred shareholders will receive 1/10th of what the common shareholders will receive.
- preferred shareholders will receive the entire $60,000.
- preferred shareholders will receive $30,000 and the common shareholders will receive $30,000.
