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Exam 11: Reporting and Interpreting Stockholders Equity

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Question 81

Multiple Choice

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Which of the following is an advantage of debt financing?

A) It does not have to be repaid.
B) Interest is discretionary.
C) Interest is tax deductible.
D) It reduces stockholder control.

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

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Question 82

Multiple Choice

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Advantages of debt financing over equity financing include that:

A) interest payments are optional.
B) debt financing does not require repayments.
C) interest payments are tax not deductible.
D) stockholders' control will not be diluted.

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

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Question 83

Multiple Choice

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On the declaration date,the company:

What of the following statements about Accumulated Other Comprehensive Income (Loss) is not correct?

GE buys back 300,000 shares of its stock from investors at $45 a share.Two years later it reissues this stock for $65 a share.The stock reissue would be recorded with a debit to Cash for:

Several years ago,Doran Corp.issued 100,000 of its $2 par value stock for a total of $800,000.This is the only time that it has sold stock.This year it purchased 1,000 shares of its own stock for $10 a share.As a result of acquiring treasury stock:

All else being equal,if net income decreases:

The return on equity ratio measures the:

Walter Co.declared a dividend.On the payment date of the dividend,its:

Wok N Roll,Inc.began on January 1,2014 by issuing 100,000 shares of $1 par value common stock and 1,000 shares of $100 par value,5%,cumulative preferred stock.No dividends were declared in 2014 or 2015.In 2016,Wok N Roll declared and paid a $0.50 dividend to its common stockholders.Assuming all shares originally issued are outstanding,the total dividend declared and paid in 2016 equals:

MacDowell Corp.has 100,000 shares outstanding with a par value of $2.On March 3,it declared a 100% stock dividend,when its stock price was $15.As a result of this stock dividend,retained earnings:

An increase to Rich's Farm's account called Barry Rich,capital would occur when:

Limited liability companies (LLCs) :

Which of the following statements about a corporation is not correct?

All other things being equal,when companies repurchases its common stock:

At the end of the accounting period,but before the closing entries have been recorded,Harry,the proprietor of Harry's Bar and Grill,has a debit of $24,500 in his drawing account and a credit of $126,800 in his capital account.If his capital account has a credit balance of $137,900 after the closing,what was his net income?

Which of the following accounts is used to record a small stock dividend on common stock but is not used to record a large stock dividend on common stock?

The number of shares issued represents the number of shares:

Use the information above to answer the following question.What was the amount of additional paid-in capital reported in the balance sheet?

Common stock's par value is: