The ZZ Corporation had the following shares of stock outstanding at December 31, 2010: Common Stock $50 par value, 40,000 shares outstanding; and Preferred Stock, 6%, $100 par value, cumulative, 10,000 shares outstanding. Dividends for 2008 and 2009 were
$180,000 / $70,000
The Kramer Company was started when it issued 200 shares of $5 par value common stock at market price of $20 per share. The company repurchased 10 shares at a market price of $15 per share. Later the company reissued 5 shares at a market price of $20 per
A. increase cash by $4,000, increase c/s by $1,000, increase PIC by $3,000
B. decrease assets, decrease equity, increase treasury stock
C. Increase additional paid-in capital by $25
D. $5,150
What are characteristics of a sole proprietorship?
One person owns the business, so one capital account is shown on the balance sheet.
Advantages: single tax
Disadvantages: limited life, unlimited liability, hard to transfer ownership
What are characteristics of a partnership?
Two or more owners of the business, so two or more capital accounts are shown on the balance sheet (one for each partner).
Advantages: single tax
Disadvantages: limited life, unlimited liability, hard to transfer ownership
What are characteristics of a corporation?
Many owners of the business, so common stock and retained earnings are shown on the balance sheet.
Advantages: easily transfer ownership, legal entity (limited liability), unlimited life, easy to raise financing
Disadvantages: double tax, many regulations
Jan Irving started a proprietorship on January 1, 2010 with a $1,000 cash contribution to the business. During the first year of operations the company generated $5,000 of cash revenue and incurred $2,000 of cash expenses. Also, Jan withdrew $500 from the
$3,500
ABC Company is authorized to issue 100,000 shares of common stock. The company issued 60,000 shares of common stock and later repurchased 15,000 shares of its own common stock. How many shares are outstanding?
45,000
Which of the following statements concerning a two-for-one stock split is true?
-the number of shares outstanding will decrease
-the market price of the stock would be expected to increase
-the company's assets will decrease
-the amount of stockholders' e
the amount of stockholders' equity is not affected
EFG Company paid cash to purchase treasury stock. What affect does this have on the company's financial statements?
- assets
na liabilities
- equity
na revenue
na expenses
na net income
- cash flow (FA)
Madison Co. paid dividends of $4,000; $11,000; and $20,000 during 2008, 2009, and 2010 respectively. The company had 1,000 shares of preferred stock outstanding with a $10 per share cumulative dividend. The amount of dividends received by the common share
5,000
Which of the following statements about types of business entities is true?
-for accounting purposes, a sole proprietorship is not a separate entity from its owner
-one advantage of corporations is limited liability for stockholders
-ownership in a partne
one advantage of corporations is limited liability for stockholders
Mitchell Company was authorized to issue 64,000 shares of common stock. The company issued 34,000 shares of stock and later purchased 6,400 shares of treasury stock. The number of outstanding shares of common stock is:
27,600
At the end of the accounting period, Isaac Company had a balance of $5,900 in its common stock account, additional paid in capital of $5,900, retained earnings of $4,900, and $2,900 of treasury stock. The total amount of stockholders' equity is:
$13,800
Which of the following entities would have a "Paid-in Capital in Excess" account in the equity section of the balance sheet?
-corporation
-partnership
-sole proprietorship
-all of the above
-corporation
Describe the financial statement presentation of stockholders equity after the following actions:
Issued 200 shares of $12 par value common stock for $25 a share. Five hundred shares are authorized. Purchased 75 shares of treasury stock at $22 a share.
Common stock, $12 par value,
500 authorized, 200 shares issued, $2,400
125 outstanding
Paid in Capital in Excess of Par - Common $2,600
Less: Treasury Stock, 75 shares @ $12 per share ($1,650)
What effect will the declaration and distribution of a stock dividend have on net income and cash flows?
no effect on net income or cash flows
Tyrone Gonzales started a sole proprietorship by depositing $49,000 cash in a business checking account. During the accounting period the business earned $35,000 of net income and Gonzales withdrew $19,500 cash from the business. Based on this information
$64,500.
Madison Co. paid dividends of $4,000; $11,000; and $20,000 during 2008, 2009 and 2010 respectively. The company had 1,000 shares of preferred stock outstanding with a $10 per share cumulative dividend. The amount of dividends received by the common shareh
$5,000.
What does the term "double taxation" refer to?
Corporations must pay income taxes on their net income and their stockholders pay income tax on the dividends they receive.
The 2011 income statement of Greene Co. reported wages expense of $245,000; the 2010 balance sheet showed a balance in wages payable of $19,400, while the 2011 balance sheet included wages payable of $30,500. What amount of cash was paid for wages in 2011
$233,900
The Knight Company reported depreciation expense of $10,000 and net income of $16,000 on its 2011 income statement. During 2011 the company's accounts receivable balance decreased by $4,000. Based on this information alone, what was the amount of cash flo
$30,000
For the year ended December 31, 2011, Flanders Company made cash payments of $34,000 for dividends, paid interest of $18,400, paid $15,800 cash to suppliers, and purchased equipment for $114,000 cash. The amount of cash used by investing activities for 20
$114,000
For the year ended December 31, 2011, Binford Company had cash collections from customers of $110,000, cash paid to employees of $18,000, cash paid to suppliers of $54,000, cash used to retire long-term bonds of $16,000, and cash payments for dividends of
$38,000
Under the indirect method, which of the following items would be added to net income to determine the cash flow from operating activities?
-accrued interest receivable
-decrease in the balance of accounts payable
-depreciation expense
-gain on the sale of
depreciation expense
cash receipts from interest on a note receivable would be classified on the statement of cash flows in the:
operating activity section
Hogan Company, a small consulting firm, charges all of its operating expenses on Accounts Payable. On January 1, 2011, Hogan's Accounts Payable balance was $11,000 and, during the year, an additional $104,000 of operating expenses was charged on account.
$92,000
Which of the following transactions affects cash flows?
-a write off of an uncollectible account
-issuance of a stock dividend
-payment of dividends declared in a previous year
-recognition of depreciation expense
payment of dividends declared in a previous year
which of the following cash transactions is classified as an investing activity?
-cash borrowed
-cash received from issuing stock
-cash received from revenue
-cash collected on a loan
cash collected on a loan
XYZ company owns equipment that costs $25,000. The equipment has a four-year useful life and a $5,000 salvage value. Assuming the company uses straight-line depreciation, the amount of depreciation expense that would appear each year on the statement of c
zero
A building costing $55,000 with $16,500 of accumulated depreciation was sold for $40,000. How would the cash flow from the sale appear on the statement of cash flows?
$40,000 in investing activities
The owners of X Company invested $2,000 in the company. X Company used the cash to invest in Y Company. On X's statement of cash flows these transactions would be classified, respectively, as what kinds of activities?
-investing/investing
-financing/finan
financing/investing
The sum of the three major components (operating, investing, and financing) on a statement of cash flows will add up to what?
the change in the cash account balance between the beginning and ending of the period
What do these things affect on the balance sheet?
a. write off accounts receivable
b. issue stock dividend
c. recognize depreciation expense
d. pay dividend declared last year
e. declaration date of dividend
a. A/R dec., allow for doubt acct dec.
b. common stock inc., retained earn dec.
c. dep exp inc., accumulated dep inc.
d. cash dec., dividend payable dec.
e. retained earn dec., dividend payable inc.
Templeton Company's Balance Sheet:
Liabilities and Stockholder's Equity
Accounts payable $2,380
Salaries payable 4,380
Bonds payable (2020) 10,000
Capital stock, no par 16,600
Retained earnings 16,600
Total Liabilities and Stockholder's Equity $49,960
Wha
33.55%
Harker Corporation reported net income of $69,000 in 2009. The company had 42,000 shares of common stock outstanding at a market price of $54 per share. Harker's price-earnings ratio was:
32.87:1
Lauer Company reported net income of $68,800 on sales of $304,000. The company has total assets of $504,000 and total liabilities of $108,000. What is the company's return on equity ratio? (Round your answer to 2 decimal places.)
17.37%
Mitchell Company has total current assets of $65,000 including inventory of $10,000, and current liabilities of $25,000. The company's current ratio is
2.6
Otteman Company reported net income of $16,700 on gross sales of $80,000. The company has average total assets of $115,200, of which $100,000 is property, plant and equipment. What is the company's return on investment?
14.5%
Pakeham Company has cash of $10,000, accounts receivable of $34,000, inventory of $26,000, and, equipment of $50,000. Assuming current liabilities of $24,000, this company's working capital is
$46,000
What is a quick acid test?
(cash+marketable securities+accts receivable)/current liabilities
ABC Company's merchandise inventories and other selected amounts for 2010 follow:
Sales $3,000,000
CGS 2,200,000
Merchandise Inventory:
Beginning of the year 500,000
End of the year 600,000
Assuming the merchandise inventory buildup was relatively constan
4.00
CGS/Inventory(avg.)
CC Company wrote of a $100 uncollectible account receivable agains the $1,200 balance in its allowance account. Compare the current ratio before the write off with the current ratio after the write off.
The current ratio remains the same.