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Accounting Quiz

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Question;1. Occidental Produce Company has 40,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding. The common stock is $0.01 par value, the preferred stock is 4% non-cumulative, with $100 par value. On October 15, 2014, the company declares a total dividend payment of $40,000. What is the total amount of dividends that will be paid to the common shareholders? (Points: 1) $40,000 $32,000 $ 400 $ 4,500 None of these is correct2. Which of the following is a TRUE statement about a corporation? (Points: 1) The owners of a corporation have co-ownership of the property of the corporation. A corporation is not taxed on the corporation's business income. A corporation has a limited life. The owners of a corporation have limited liability for the corporation's debts.3. The purchase of treasury stock requires a credit to the Common stock account. (Points: 1) True False4. Which of the following is an advantage of preferred stock? (Points: 1) Preferred shareholders are guaranteed that they will not take a loss on their investment. Preferred shareholders have higher voting rights than common shareholders. Preferred shareholders may sell their shares for a price higher than that of common stock. Preferred shareholders have the first claim on dividend funds.5. All forms and classes of stock carry voting rights. (Points: 1) True False6. A corporation is a separate legal entity formed under the laws of a particular state. (Points: 1) True False7. Cash dividends affect only stockholders' equity accounts. (Points: 1) True False8. On June 30, 2014, Stephans Company showed the following data on the equity section of their balance sheet:Stockholders' equity Common stock, $1 par100,000 shares authorized$40,000 40,000 shares issuedPaid-in capital in excess of par 260,000Retained earnings 940,000Total stockholder's equity $1,240,000On July 1, 2014, Stephans distributed a 5% stock dividend. The market value of the stock at that time was $13 per share. Following this transaction, the total shareholders? equity would go down by $26,000. (Points: 1) True False9. On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet:Stockholders' equity Common stock, $1 par100,000 shares authorized$40,000 40,000 shares issuedPaid-in capital in excess of par 260,000Retained earnings 940,000Total stockholder's equity $1,240,000On July 1, 2013, Stephans distributed a 5% stock dividend. The market value of the stock at that time was $13 per share. Following this transaction, what would be the new number of shares issued shown on the balance sheet? (Points: 1) 26,000 66,000 42,000 105,000 None of these is correct10. If preferred stock is non-cumulative, then the company does NOT need to pay dividends that were passed in previous years. (Points: 1) True False

 

Paper#45103 | Written in 18-Jul-2015

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