Question :
115. Roberto Designers was organized January 1, 2015. The firm : 1255728
115. Roberto Designers was organized on January 1, 2015. The firm was authorized to issue 100,000 shares of $5 par value common stock. During 2015, Roberto had the following transactions relating to stockholders’ equity:
Issued 10,000 shares of common stock at $7 per share.
Issued 20,000 shares of common stock at $8 per share.
Reported a net income of $100,000.
Paid dividends of $50,000.
Purchased 3,000 shares of treasury stock at $10 (part of the 20,000 shares issued at $8).
What is total stockholders’ equity at the end of 2015?
a.$270,000.
b.$300,000.
c.$250,000.
d.$200,000.
116. The balance sheet of California Clothing reports total equity of $600,000 and $700,000 at the beginning and end of the year, respectively. Net income and sales for the year are $65,000 and $1,300,000, respectively. What is California Clothing’s return on equity?
a.
10%.
b.
20%.
c.
200%.
d.
5%.
117. The balance sheet of Sand Sportswear reports total equity of $500,000 and $650,000 at the beginning and end of the year, respectively. The return on equity for the year is 20%. What is Sand Sportswear’s net income for the year?
a.
$100,000.
b.
$130,000.
c.
$2,875,000.
d.
$115,000.
118. Financial information for Accessories Unlimited includes the following selected data:
Net income (in millions)
$150
Shares outstanding (in millions)
300
Stock price
$20.00
What is the company’s return on the market value of equity?
a.2.5%.
b.7.5%.
c.25%.
d.50%.
119. Financial information for Accessories Unlimited includes the following selected data:
Net income (in millions)
$150
Shares outstanding (in millions)
300
Stock price
$20.00
What is the company’s earnings per share?
a.$0.50.
b.$0.25.
c.$2.00.
d.$0.05.
120. Financial information for Accessories Unlimited includes the following selected data:
Net income (in millions)
$150
Shares outstanding (in millions)
300
Stock price
$20.00
What is the company’s price-earnings ratio?
a.20.0.
b.40.0.
c.60.0.
d.80.0.
121. Return on equity is calculated as:
a. Net income divided by average stockholders’ equity.
b. Net income divided by ending stockholders’ equity.
c. Net income divided by average market value of equity.
d. Net income divided by ending market value of equity.
122. Why doesn’t stockholders’ equity equal the market value of equity?
a. Stockholders’ equity usually does equal the market value of equity.
b. Investors tend to incorrectly price the market value of equity.
c. It’s related to the use of historical cost to report many long-term assets and the expensing of value generating costs such as research and development and advertising.
d. It’s due to incorrect entries prepared by accountants.
123. Earnings per share (EPS)
a. Is useful in comparing earnings performance across companies.
b. Is useful in comparing earnings performance for the same company over time.
c. Is useful in both comparing earnings performance across companies and in comparing earnings performance for the same company over time.
d. Is not useful in comparing earnings performance across companies or in comparing earnings performance for the same company over time.
124. Which of the following statements is not true regarding earnings per share?
a. Earnings per share is useful in comparing earnings performance across companies at the same point in time.
b. Earnings per share is useful in comparing earnings performance for the same company over time.
c. Earnings per share is calculated as net income minus dividends on preferred stock all divided by the average number of common shares outstanding.
d. Earnings per share is forecasted by financial analysts.
125. Financial information for Retro Designs includes the following selected data:
Net income (in millions)
$175
Preferred stock dividends (in millions)
$25
Common shares outstanding (in millions)
250
Stock price
$10.00
What is the company’s earnings per share?
a.$0.60.
b.$0.70.
c.$0.50.
d.$0.05.
126. Financial information for Retro Designs includes the following selected data:
Net income (in millions)
$175
Preferred stock dividends (in millions)
$25
Common shares outstanding (in millions)
250
Stock price
$10.00
What is the company’s price-earnings ratio?
a.14.3.
b.16.7.
c.5.7.
d.15.0.
127. The PE ratio:
a. Tends to be higher for growth stocks.
b. Tends to be higher for value stocks.
c. Indicates how a stock is trading in relation to cumulative earnings over the life of the company.
d. Typically is less than 1.
0
Sun9681
