ACG2021-QUIZ 11

 Review Test Submission: Q11 - Quiz 11

•Question 1

5 out of 5 points

A stock split is the distribution of additional shares of stock to stockholders according to their percent of ownership.

Selected Answer:             True

•Question 2

5 out of 5 points

Sweet Company’s outstanding stock consists of 1,000 shares of cumulative 5% preferred stock with a $100 par value and 5,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.

Dividend Declared

Year 1    $              2,000

Year 2    $              6,000

Year 3    $              32,000

________________________________________

The total amount of dividends paid to preferred and common shareholders over the three-year period is:

Selected Answer:             $15,000 preferred; $25,000 common.

•Question 3

5 out of 5 points

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:

Selected Answer:             $7,125.

•             Question 4

5 out of 5 points

Paid-in capital is the total amount of cash and other assets the corporation receives from its stockholders in exchange for its stock.

Selected Answer:             True

•             Question 5

5 out of 5 points

West Company declared a $0.50 per share cash dividend. The company has 190,000 shares issued, and 10,000 shares in treasury stock. The journal entry to record the dividend declaration is:

Selected Answer:             Debit Retained Earnings $90,000; credit Common Dividends Payable $90,000.

•             Question 6

0 out of 5 points

Halverstein Company's outstanding stock consists of 7,000 shares of cumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.

Dividend Declared

Year 1    $              0

Year 2    $              6,000

Year 3    $              32,000

________________________________________

The amount of dividends paid to preferred and common shareholders in Year 2 is:

Selected Answer:             $0 preferred; $6,000 common.

•             Question 7

5 out of 5 points

If a corporation is authorized to issue 1,000 shares of $5 common stock, it is said to have $5,000 of stock outstanding.

Selected Answer:             False

•             Question 8

5 out of 5 points

Stocks that pay relatively large cash dividends on a regular basis are called:

Selected Answer:             Income stocks.

•             Question 9

5 out of 5 points

If a company has noncumulative preferred stock, basic earnings per share is equal to net income less preferred dividends declared divided by the number of weighted average common shares outstanding.

Selected Answer:             True

•             Question 10

5 out of 5 points

Prior to May 1, Fortune Company has never had any treasury stock transactions. A company repurchased 100 shares of its common stock on May 1 for $5,000. On July 1, it reissued 50 of these shares at $52 per share. On August 1, it reissued the remaining treasury shares at $49 per share. What is the balance in the Paid-in Capital, Treasury Stock account on August 2?

Selected Answer:             $50.

•             Question 11

5 out of 5 points

Dividend yield is defined as the annual cash dividends per share divided by the market price per share of a company's stock.

Selected Answer:             True

•             Question 12

5 out of 5 points

A class of stock that can usually be issued at any price without creating a minimum legal capital deficiency is called:

Selected Answer:             No-par stock.

•             Question 13

5 out of 5 points

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:

Selected Answer:             Stock dividend.

•             Question 14

5 out of 5 points

A premium on common stock:

Selected Answer:             Occurs when a corporation sells its stock for more than par or stated value.

•             Question 15

5 out of 5 points

Dividend yield is computed by dividing earnings per share by the market value per share.

Selected Answer:             False

•             Question 16

5 out of 5 points

Common stock always carries a preference for receiving dividends over preferred stock.

Selected Answer:             False

•             Question 17

5 out of 5 points

A debit balance in retained earnings is referred to as an accumulated deficit.

Selected Answer:             True

•             Question 18

5 out of 5 points

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share. The issue price was $10 per share. The entry to record this transaction would be:

Selected Answer:             Debit Cash $50,000; credit Paid-in Capital in Excess of Stated Value, Common Stock $45,000; credit Common Stock $5,000.

•             Question 19

5 out of 5 points

The amount of annual cash dividends distributed to common shareholders relative to the common stock's market value is the:

Selected Answer:             Dividend yield.

•             Question 20

5 out of 5 points

A company has earnings per share of $6.50. Its dividend per share is $0.50, and its market price per share is $80. Its price-earnings ratio equals 13.

Selected Answer:             False