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11 Cards in this Set
- Front
- Back
- 3rd side (hint)
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43. In order to limit the use of a shell company, the SEC has proposed:
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A) Greater financial disclosures.
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A) Greater financial disclosures.
B) Eliminating this type of company. C) Arresting promoters of shell companies for fraud. D) That its stock only be sold in foreign countries. |
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44. Which of the following is not a characteristic of the corporate form of organization?
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C) Stockholders have authority to decide by majority vote the amount of dividends to be paid.
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A) The owners of a corporation cannot lose more than the amount of their investment.
B) Shares of stock in a corporation are more readily transferable than is an interest in a partnership. C) Stockholders have authority to decide by majority vote the amount of dividends to be paid. D) The corporation is a very efficient vehicle for obtaining large amounts of capital required for large-scale production. |
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45. If a corporation has issued a single class of stock, it must be:
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A) Common.
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A) Common.
B) Preferred. C) Par-value. D) Cumulative preferred. |
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46. The overall effect of declaring and distributing a cash dividend includes each of the following except:
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D) Reducing net income for the period.
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A) Reducing total assets.
B) Reducing stockholders' equity. C) Reducing the balance of the Retained Earnings account. D) Reducing net income for the period. |
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47. Which statement is true about a stock split?
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C) Total shareholders' equity remains the same.
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A) Total shareholders' equity increases.
B) Total shareholders' equity decreases. C) Total shareholders' equity remains the same. D) A change in total stockholders' equity depends upon whether it is a 2-for-1 split or a 1-for-2 split. |
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48. When treasury stock is reissued at a price above cost:
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B) Total paid-in capital is increased.
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A) The corporation recognizes a gain to be recorded on the income statement.
B) Total paid-in capital is increased. C) The reissuance is treated as an extraordinary item in the corporation's income statement. D) Retained earnings is increased. |
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49. Sigma Corporation is authorized to issue 4,000,000 shares of $2 par value capital stock. The corporation issued half the stock for cash at $4 per share, earned $280,000 during the first three months of operation, and declared a cash dividend of $40,000. The total paid-in capital of Sigma Corporation after three months of operation is:
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B) $8,000,000.
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A) $7,960,000.
B) $8,000,000. C) $8,250,000. D) $8,280,000. |
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50. Royal Corp. has total stockholders' equity of $5,100,000. The company's outstanding capital stock includes 100,000 shares of $10 par value common stock and 20,000 shares of 6%, $100 par value preferred stock. (No dividends are in arrears.) The book value per share of common stock is:
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C) $31.
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A) $19.
B) $29. C) $31. D) $51. |
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51. Roberts Corporation has net assets of $1,872,000 and paid-in capital of $700,000. The only stock issue consists of 72,000 outstanding shares of common stock. From this information, it can be deduced that the company has:
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D) A book value of $26 per share of common stock.
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A) Retained earnings of $1,872,000.
B) A deficit of $1,172,000. C) A book value of $10 per share of common stock. D) A book value of $26 per share of common stock. |
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52. Flagstaff Boat Yard has total stockholders' equity of $6,200,000, comprised of the following:
- $2,000,000 in $8 preferred stock consisting of 20,000 shares of $100 par value. - $800,000 in common stock of $5 par value per share. - $1,600,000 of additional paid-in capital. - $1,800,000 in retained earnings. Assuming there are no dividends in arrears, the book value per share of common stock is: |
A) $26.25.
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A) $26.25.
B) $25.00. C) $16.25. D) $5.00. |
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53. On September 1, 2005, Saturn Corporation's common stock was selling at a market price of $300 per share. On that date, Saturn announced a 3 for 2 stock split. At what price would you expect the stock to trade immediately after the split goes into effect?
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C) $200.
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A) $150.
B) $450. C) $200. D) $300. |
