THESE ARE ALL ONE QUESTION

To calculate earnings per share, preferred dividends declared

Question 12 options:

	should be subtracted from net income.
	should be added to net income.
	have no impact on the earnings per share calculation.
	must be added to the number of common shares outstanding.

Question 13 (1 point)

Davidson Corporation issued 100 000 of no-par value capital stock at the time of its incorporation. The stock was issued for cash at a price of $13 per share. During the first year of operations the company sustained a net loss of $30 000. The year-end balance sheet would show the balance of the Share Capital account to be:

Question 13 options:

	$975 000
	$1 050 000
	$1 270 000
	$1 300 000

Question 14 (1 point)

Which of the following events is most likely to cause a decline in the market of the common stock of a large, profitable, and solvent corporation?

Question 14 options:

	A general increase in stock prices
	The dividend on the common stock is increased
	Many financial analysts lower their estimate of the company's expected future earnings
	The market price of the company's convertible preferred stock rises

Question 15 (1 point)

Matthews Corporation has total shareholders equity of $600 000 and contributed capital of $250 000. The only stock issue consists of 25 000 outstanding shares of common stock. From this information, it can be deduced that the company has:

Question 15 options:

	Retained earnings of $600 000
	A deficit of $350 000
	A book value of $24 per share of common stock
	A book value of $14 per share of common stock

Question 16 (1 point)

Shareholders of a corporation directly elect

Question 16 options:

	the president of the corporation.
	the board of directors.
	the controller of the corportation.
	all of the employees of the corporation.

Question 17 (1 point)

Which of the following would not be true of a privately held corporation?

Question 17 options:

	It is sometimes called a closely held corporation.
	Its shares are regularly traded on the Vancouver Stock Exchange.
	It does not offer its shares for sale to the general public.
	It is usually smaller than a publicly held company.

Question 18 (1 point)

The ability of a corporation to obtain capital is

Question 18 options:

	enhanced because of limited liability and ease of share transferability.
	less than a partnership.
	restricted because of the limited life of the corporation.
	about the same as a partnership.

Question 19 (1 point)

Retained earnings are

Question 19 options:

	always equal to the amount of cash that the corporation has generated from operations.
	a part of the contributed capital of the corporation.
	a part of the shareholder's claim on the total assets of the corporation.
	closed at the end of each accounting period.

Question 20 (1 point)

Dividends in arrears on cumulative preferred shares

Question 20 options:

	never have to be paid.
	must be paid before common shareholders can receive a dividend.
	should be recorded as a current liability until they are paid.
	enable the preferred shareholders to share equally in corporate earnings with the common shareholders.

Question 21 (1 point)

Two classifications appearing in the contributed capital section of the balance sheet are

Question 21 options:

	preferred shares and common shares.
	contributed capital and retained earnings.
	share capital and additional contributed capital.
	share capital and retained earnings.

Question 22 (1 point)

The date on which a cash dividend becomes a binding legal obligation is on the

Question 22 options:

	declaration date.
	date of record.
	payment date.
	last day of the fiscal year end.

Question 23 (1 point)

The effect of a stock dividend is to

Question 23 options:

	decrease total assets and shareholders' equity.
	change the composition of shareholders' equity.
	decrease total assets and total liabilities.
	increase the book value per common share.

Question 24 (1 point)

Dividends Payable is classified as a

Question 24 options:

	long-term liability.
	contra shareholders' equity account to Retained Earnings.
	current liability.
	shareholders' equity account.

Question 25 (1 point)

Samson Inc. has 1 000 common shares issued at $100 and currently trading at $200. The entry to record declaration of a 10% stock dividend is

Question 25 options:

DR Common Stock Dividends Distributable	$100 000
CR Retained Earnings		$100 000

DR Retained Earnings	$100 000
CR Cash		$100 000

DR Stock Dividends	$20 000
CR Common Stock Dividends Distributable		$20 000

DR Common Stock Dividends Distributable	$20 000
CR Common Shares		$20 000

Question 26 (1 point)

Irwin Inc. had 200 000 common shares before a stock split occurred, and 400 000 shares after the stock split. The stock split was

Question 26 options:

	2 for 4.
	4 for 1.
	1 for 4.
	2 for 1.