UESTION 11

Below is information obtained from ABC Corp.'s 10K for 2019:

Compensation Expense $ 300,000

Liability-Restricted Stock Units 200,000

SARs-Capital (Paid-in-capital SAR plan) 400,000

Preferred Stock (8.5%, $ 50 par value) 2,000,000

Common Shares ($ 1 par value) 4,500,000

Contributed Capital in Excess of Par Value - Preferred Shares 400,000

Contributed Capital in Excess of Par Value Common Shares 550,000

Retained Earnings (12/31) 1,100,000

Shares in Portfolio (at cost) 150,000

According to the information presented, the total equity of ABC Corp. shareholders is

$ 9,000,000

$ 8,500,000

$ 8,800,000

$ 9,100,000

5 points

QUESTION 12

Compensation expense resulting from the implementation of an option plan that does not incorporate essential option features (for example, the discount is not significant) and in which all full-time employees can participate is

determined on the grant date and recognized during the employees' service period

zero and therefore the equity-options account is not credited

recognized when employees exercise options

recognized during the service period

5 points

QUESTION 13

The result of a stock split is

A greater number of shares in circulation with a lower price per share in the market.

A greater number of shares in circulation with a higher price per share in the market.

A lower number of shares in circulation with a lower price per share in the market.

A lower number of shares in circulation with a higher price per share in the market.

5 points

QUESTION 14

The main FASB code that deals with dividends is:

810

740

610

505

5 points

QUESTION 15

As of the date of the financial statements, the number of common shares issued will exceed the number of shares outstanding as a result of

the declaration of a division or division of shares (stock-split-up).

the declaration of a large stock dividend.

the purchase of portfolio shares (treasury stock).

the purchase and immediate withdrawal of common shares.

5 points

QUESTION 16

How does a 2: 1 stock split (stock-split-up) affect the balance of retained earnings?

increases it.

reduces it.

has no effect

the data are not sufficient to answer.