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Exam 11: Corporate Reporting and Analysis

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Question 61

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A company has earnings per share of $9.60.Its dividend per share is $0.50,its market price per share is $110,and its book value per share is $96.Its price-earnings ratio equals:

A) 1.15.
B) 0.87.
C) 19.2.
D) 10.0.
E) 11.46.

F) B) and C)
G) All of the above

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Question 62

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What is treasury stock? What reasons might a company hold treasury stock?

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Treasury stock is the company's own issu...

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Question 63

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A company reported the following stockholders' equity on January 1 of the current year: $\begin{array} { | l | l | l | } \hline \begin{array} { l } \text { Common stock, } \$ 10 \text { par, } 1,000,000 \text { shares } \\\text { authorized, } 250,000 \text { shares issued } \ldots \ldots \ldots \ldots \ldots \ldots \ldots\end{array} & \$ 2,500,000 \\\hline \text { Paid-in capital in excess of par, common } \ldots \ldots \ldots \ldots \ldots \ldots & 1,260,000 \\\hline \text { Retained earnings } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 1,675,000 \\\hline \text { Total stockholders' equity } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & \$ 5,435,000 \\\hline\end{array}$ Prepare journal entries for the following selected transactions related to this company's stock during the current year: $\begin{array} { | l r | l | } \hline \text { Mar. } & 1 & \text { Purchased } 10,000 \text { shares of treasury stock for } \$ 18 \text { per share. } \\\hline \text { May } & 5 & \text { Sold } 4,000 \text { shares of treasury stock for } \$ 16 \text { per share. } \\\hline \text { Oct. } & 12 & \text { Sold } 2,000 \text { shares of treasury stock for } \$ 19 \text { per share. } \\\hline\end{array}$

Stock that was reacquired and is still held by the issuing corporation is called:

________ are corrections of material errors in prior period financial statements.

Prior to June 30,a company has never had any treasury stock transactions.A company repurchased 100 shares of its $1 par common stock on June 30 for $40 per share.On July 20,it reissued 50 of these shares at $46 per share.On August 1,it reissued 20 of the shares at $38 per share.What is the journal entry necessary to record the repurchase of stock on June 30?

Stated value of no-par stock is:

A corporation issued 6,000 shares of its $2 par value common stock in exchange for land that has a market value of $84,000.The entry to record this transaction would include:

The Paid-in Capital,Treasury Stock account can have a zero or credit balance.

A company reported $960,000 in net income for the current year.Total weighted-average common shares outstanding are 150,000 shares,and the year-end market price is $67.20 per common share.Calculate the company's price earnings ratio.

Prior period adjustments to financial statements can result from:

A corporation is responsible for its own acts and debts because it is considered a ________.

A stock split increases total stockholders' equity.

The journal entry to record the declaration of dividends on common stock includes a debit to Retained Earnings and a credit to Common Dividend Payable.

On September 20,Fletcher Corporation issued 25,000 shares of no-par common stock for equipment having a market value of $85,000.Prepare the general journal entry to record this transaction.

A company issued 70 shares of $30 par value preferred stock for $4,000 cash.The journal entry to record the issuance is:

If a company has no preferred stock,basic earnings per share is equal to net income divided by the number of weighted average common shares outstanding.

Companies report prior period adjustments,net of any income tax effects in the:

Cumulative preferred stock has a right to be paid both current and prior periods' unpaid dividends before any dividend is paid to common shareholders.

A stock dividend decreases the market price of the company's stock.