Question 1

Noncumulative preferred dividends in arrears

Accepted Answer

Noncumulative preferred dividends do not accumulate if not declared, so they are neither paid nor disclosed as a liability.

Question 2

Rome Corp.was organized on January 1, 2014, with the following authorized share capital: 20,000 common shares, no par value 6,000, $.05, cumulative preferred shares, no par value During 2014, the corporation issued 10,000 common shares for $350,000 and 5,000 preferred shares at $24 per share.On December 20, 2014, subscriptions for 1,000 preferred shares were taken at a purchase price of $30.These subscribed shares were paid for on January 2, 2015. What should Rome report as total contributed capital on its December 31, 2014, balance sheet?

Accepted Answer

The answer of Rome Corp.was organized on January 1, 2014,...

Question 3

Dividends are NOT paid on

Accepted Answer

Dividends are not paid on treasury shares since they are shares that have been repurchased by the company and are held in its own treasury.

Question 4

The shareholders' equity section of Zagreb Corp.at December 31, 2013 was: Common shares, no par value; authorized 20,000 shares;  On February 28, 2014, when the market value of Zagreb's shares was $12 per share, the board of directors declared a 15% stock dividend, and accordingly 1,500 additional shares were issued.For the two months ended February 28, 2014, Zagreb reported a net loss of $20,000. What amount should Zagreb report as retained earnings at February 28, 2014?

Accepted Answer

The answer of The shareholders' equity section of Zagreb Corp.at...

Question 5

Use the following information to answer questions . 
-The total amount of contributed surplus at December 31, 2014 is

Accepted Answer

The answer of Use the following information to answer questions...

Question 6

Which of the following is NOT a valid reason for a stock split?

Accepted Answer

A stock split is typically done to reduce the market price of shares, making them more affordable and attractive to a broader range of investors, not to increase the market price.

Question 7

Use the following information to answer questions Prague Corp.is authorized to issue 400,000 no par value common shares.Subscribers agree to purchase shares at $15 per share with a 30% down payment.
-Lisbon Corp.has 1,000,000 no par common shares authorized, of which 800,000 shares are outstanding.The average carrying value of the shares is $5 per share.When the market value was $10 per share, Lisbon declared a 10% stock dividend.What entry, if any, should Lisbon make to record this dividend declaration?

Accepted Answer

The answer of Use the following information to answer questions...

Question 8

Hamilton Ltd.has both common shares and non-participating, non-cumulative preferred shares outstanding.The book value per common share is NOT affected by

Accepted Answer

The answer of Hamilton Ltd.has both common shares and non-participating,...

Question 9

Shareholders' equity is generally classified into two major categories:

Accepted Answer

Shareholders' equity is primarily divided into two main categories: earned capital and contributed capital. Earned capital is primarily represented by retained earnings, which are the profits that a company has earned over time and chosen to reinvest in the business rather than distribute to shareholders as dividends. Contributed capital (also known as paid-in capital) represents the funds that shareholders have invested directly in the company through the purchase of its stock.

Question 10

Cash dividends declared on the no par value common shares of Athens Corp.were as follows:  Shareholders' Equity 15- 23 The 4th quarter cash dividend was declared on December 20, 2014, to shareholders of record on December 31, 2014, to be paid on January 9, 2015.In addition, Athens declared a 10% common stock dividend on December 1, 2014, when there were 400,000 shares issued and outstanding, and the market value of the common shares was $16 per share.The shares were issued on December 21, 2014. What was the effect on Athens' shareholders' equity accounts during 2014 as a result of the above transactions?

Accepted Answer

The answer of Cash dividends declared on the no par...

Question 11

The rate of return on common shareholders' equity shows

Accepted Answer

The rate of return on common shareholders' equity measures how effectively a company is using the equity invested by its shareholders to generate net income, indicating the profitability relative to the equity.

Question 12

On June 30, 2014, when Vienna Inc.'s shares were selling at $65 per share, its capital accounts were as follows: Common Shares, no par, 60,000 shares issued and outstanding .................................................................$2,400,000 Retained Earnings ....................................................................3,600,000 If a 5% stock dividend were declared and distributed, the Common Shares account balance would be

Accepted Answer

A 5% stock dividend on 60,000 shares is 3,000 additional shares (60,000 * 0.05). At $65 per share, this increases the Common Shares account by $195,000 (3,000 * $65), resulting in a new balance of $2,595,000 ($2,400,000 + $195,000).

Question 13

The price earnings (P/E)ratio is calculated by

Accepted Answer

The price earnings ratio is calculated by dividing the market price of the share by earnings per share. It is a measure of how much investors are willing to pay for each dollar of earnings generated by the company.

Question 14

Use the following information to answer questions Prague Corp.is authorized to issue 400,000 no par value common shares.Subscribers agree to purchase shares at $15 per share with a 30% down payment.
-Presented below is information related to Madrid Corporation:  The total amount that will be added to the Common Shares account when the final subscriptions are received will be

Accepted Answer

The answer of Use the following information to answer questions...

Question 15

Use the following information to answer questions Prague Corp.is authorized to issue 400,000 no par value common shares.Subscribers agree to purchase shares at $15 per share with a 30% down payment.
-Assume that subscribers agree to purchase 50,000 shares and make the required down payment.The journal entry to record receipt of the subscriptions includes a

Accepted Answer

The journal entry to record receipt of the subscriptions would include a credit to Common Shares Subscribed for the total amount of $750,000. This is because subscribers have agreed to purchase 50,000 shares at $15 per share, which amounts to $750,000. The down payment of 30% or $225,000 would be recorded with a debit to Subscriptions Receivable. So, option B is correct.

Question 16

The payout ratio can be calculated by

Accepted Answer

The payout ratio measures the portion of earnings that are paid out as dividends. It is calculated by dividing cash dividends by net income less preferred dividends. Therefore, choice B is the correct option as it reflects this calculation. Choice A is not correct as it divides cash dividends by earnings per share which does not account for preferred dividends. Choice C is not correct as it divides cash dividends by market price per share which is not a measure of earnings. Choice D is not correct as it divides net income by cash dividends per share, which is not the correct formula for calculating payout ratio.

Question 17

Use the following information to answer questions . 
-The total amount in the Common Shares account at December 31, 2014 is

Accepted Answer

The answer of Use the following information to answer questions...

Question 18

Under IFRS, the Statement of Changes in Shareholders' Equity must include Shareholders' Equity 15- 17

Accepted Answer

Under IFRS, the Statement of Changes in Shareholders' Equity must include all components of equity, which are share capital, accumulated other comprehensive income, contributed surplus, and retained earnings.

Question 19

How should cumulative preferred dividends in arrears be shown on the balance sheet?

Accepted Answer

Cumulative preferred dividends in arrears are not recognized as liabilities until declared. They are disclosed in the notes to the financial statements to inform users of the potential future obligation.

Question 20

Use the following information to answer questions Prague Corp.is authorized to issue 400,000 no par value common shares.Subscribers agree to purchase shares at $15 per share with a 30% down payment.
-The journal entry to record the issuance of the shares upon receipt of the final instalment includes a

Accepted Answer

The answer of Use the following information to answer questions...

Quiz 2: Intermediate Accounting Volume 2

Noncumulative preferred dividends in arrears

Dividends are NOT paid on

Use the following information to answer questions . -The total amount of contributed surplus at December 31, 2014 is

Which of the following is NOT a valid reason for a stock split?

Hamilton Ltd.has both common shares and non-participating, non-cumulative preferred shares outstanding.The book value per common share is NOT affected by

Shareholders' equity is generally classified into two major categories:

The rate of return on common shareholders' equity shows

The price earnings (P/E) ratio is calculated by

The payout ratio can be calculated by

Use the following information to answer questions . -The total amount in the Common Shares account at December 31, 2014 is

Under IFRS, the Statement of Changes in Shareholders' Equity must include Shareholders' Equity 15- 17

How should cumulative preferred dividends in arrears be shown on the balance sheet?