ACC 557 Week 8, Quiz - Graded 100% Latest Version.docx

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? A). Land 540,000 Preferred Stock 540,000 B). Land 540,000 Preferred Stock 500,000 Paid-in Capital Excess of Par-Preferred 40,000 C). Land 500,000 Preferred Stock 500,000 D). Land 600,000 Preferred Stock 500,000 Paid-in Capital in Excess of Par-Preferred 100,000 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? A). $0 B). $50,000 C). $70,000 D). $20,000 3. A net loss A). occurs if operating expenses exceed cost of goods sold. B). is closed to Retained Earnings even if it would result in a debit balance. C). is closed to the paid-in capital account of the stockholders' equity section of the balance sheet. D). is not closed to Retained Earnings if it would result in a debit balance. 4. 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 A). debit to Cash for $60,000. B). credit to Common Stock for $60,000. C). credit to Common Stock for $112,500. D). credit to Paid-in Capital in Excess of Par for $112,500. 5. The per share amount normally assigned by the board of directors to a large stock dividend is A). the average price paid by stockholders on outstanding shares. B). the par or stated value of the stock. C). zero. D). the market value of the stock on the date of declaration. 6. IFRS treats the purchase of treasury stock as any of the following except A). a decrease to retained earnings. B). an increase to a contra equity account. C). a decrease to share premium. D). a decrease to share capital. 7. Additional paid-in capital includes all of the following except the amounts paid in A). for the par value of common stock. B). over par value. C). over stated value. D). from treasury stock. 8. Stockholders of a corporation directly elect A). the treasurer of the corporation. B). all of the employees of the corporation. C). the president of the corporation. D). the board of directors. 9. Which of the following is not a right or preference associated with preferred stock? A). Preference to corporate assets in case of liquidation B). The right to vote C). To receive dividends in arrears before common stockholders receive dividends D). First claim to dividends 10. Restricting retained earnings for the cost of treasury stock purchased is a A). legal restriction. B). stock restriction. C). voluntary restriction. D). contractual restriction. 11. A company would not acquire treasury stock A). in order to reissue shares to officers. B). as an asset investment. C). in order to increase trading of the company's stock. D). to have additional shares available to use in acquisitions of other companies. 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 A). $0. B). $600. C). $6,000. D). $12,000. 13. If stock is issued for less than par value, the account A). Paid-In Capital in Excess of Par is debited if a debit balance exists in the account. B). Paid-In Capital in Excess of Par is debited if a credit balance exists in the account. C). Paid-In Capital in Excess of Par is credited. D). Retained Earnings is credited. 14. When stock is issued for legal services, the transaction is recorded by debiting Organization Expense for the A). par value of the stock. B). market value of the stock. C). book value of the stock. D). stated value of the stock. 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 A). $60,000 will be held as restricted retained earnings and paid out at some future date. B). preferred shareholders will receive 1/10th of what the common shareholders will receive. C). preferred shareholders will receive the entire $60,000. D0. preferred shareholders will receive $30,000 and the common shareholders will receive $30,000.