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Exam 8: Liabilities and Stockholders Equity

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Question 71

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Based on the following information, what is earnings per share? $\begin{array}{ll}115,000 & \text { Common shares outstanding } \\\$ 40,000 & \text { Preferred stock cividend declared and paid } \\\$ 350,000 & \text { Net income }\end{array}$

A) $3.39
B) $3.04
C) $2.96
D) $2.70

E) None of the above
F) A) and B)

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Question 72

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Which of the following accounts is reported in the noncurrent liabilities section of the corporate balance sheet?

A) Bonds Payable
B) Common Stock
C) Dividends Payable
D) Cash

E) B) and D)
F) A) and D)

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Question 73

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Current liabilities are:

Significant changes in stockholders' equity are reported in the:

Indicate whether the following actions would (+) increase, (-) decrease, or (0) not affect a company's total assets, liabilities, and stockholders' equity. $\begin{array}{lrr}&\text { Stockloders'Equity }& \text { Liabilities}& \text { Assets}&\\ \text { (1) Declaring a cash dividend } &\\ \text { (2) Paying the cash dividend declared in (1) } &\\ \text {(3) Declaring a stock dividend } &\\ \text { (4) Issuing stock certificates for the stock } &\\ \text {dividend declared in (3) } &\\\end{array}$

If the market rate of interest is 7% and a corporation's bonds bear interest at 8%, the bonds will sell at a premium.

If 50,000 shares are authorized, 37,000 shares are issued, and 2,000 shares are reacquired, the number of outstanding shares is 35,000.

If bonds are issued at a premium, the stated interest rate is:

Before a stock dividend can be declared or paid, there must be sufficient cash.

If the market rate of interest is 9% and a corporation's bonds bear interest at 7%, the bonds will sell at a premium.

A corporation has 10,000 shares of $100 par value stock outstanding. If the corporation issues a 5-for-1 stock split, the number of shares outstanding after the split will be 2,000.