Question 8

Allen Company acquired a building valued at $155,000 for property tax purposes in exchange for 10,000 shares of its $10 par common stock. The stock is widely traded and selling for $15 per share. At what amount should the building be recorded by Allen Company?

Select one:

a. $100,000

b. $150,000

c. $155,000

d. $250,000

Question 9

How are contingent liabilities that are NOT required to be disclosed on the balance sheet but are possible recorded?

Select one:

a. These liabilities are listed on the income statement.

b. These liabilities are disclosed in the notes to the financial statements.

c. These liabilities are not required to be disclosed.

d. All contingent liabilities are required to be on the balance sheet.

Question 10

For the year that just ended, a company reports net income of $1,250,000. There are 500,000 shares authorized, 300,000 shares issued, and 250,000 shares of common stock outstanding. What is the earnings per share?

Select one:

a. $5.00

b. $2.50

c. $4.17

d. $4.81

Question 11

On June 5 Apex Co. issued a $60,000, 8%, 120-day note payable to Jones Co. How much will Jones Co. have to pay at maturity?

Select one:

a. $60,160

b. $58,400

c. $61,600

d. $59,840

Question 12

When are contingent liabilities required to be recorded?

Select one:

a. When the liability is probable.

b. When the amount is reasonable estimable.

c. When the liability becomes legally enforceable.

d. Both (a) and (b) must occur before the contingent liability is recorded.

Question 13

Most employers are required to withhold from employees which of the following employment taxes?

Select one:

a. only FICA tax

b. FICA tax, state and federal unemployment compensation tax

c. only state unemployment compensation tax

d. only federal unemployment compensation tax

Question 14

The outstanding stock is composed of 10,000 shares of $100 par, cumulative preferred $8 stock, and 50,000 shares of no-par common stock. Preferred dividends have been paid every year EXCEPT for the preceding year and the current year. If $160,000 is to be distributed as a dividend for the current year, what total amount will be distributed to the preferred stockholders?

Select one:

a. 0

b. $80,000

c. $130,000

d. $160,000