Question : 101. Which of the following not true regarding a reverse stock : 1245762

 

 

101. Which of the following is not true regarding a reverse stock split?  A. Firms reduce the number of outstanding shares by increasing the par value of the stock. B. Firms reduce the number of outstanding shares by canceling outstanding shares. C. A reverse stock split usually increases the market value per share in inverse proportion to the reverse split. D. Managers and governing boards might use reverse stock splits to keep the market price per share within some target trading range.E. Analysts use reverse stock splits to signal that the market price per share will go up disproportionately.

 

102. (CMA adapted, Jun 87 #4) The major segments of the statement of retained earnings for a period are A. dividends declared, prior period adjustments, and changes due to treasury stock transactions.B. prior period adjustments, before tax income or loss, income tax, and dividends paid.C. net income or loss from operations, dividends paid, and extraordinary gains and losses.D. net income or loss, prior period adjustments, and dividends paid and/or declared.E. net income or loss, prior period adjustments, and dividends paid and/or declared, and changes due to treasury stock transactions.

 

103. Firms may periodically distribute net assets generated by earnings to shareholders as a dividend. Firms A. increase net assets and decrease retained earnings.B. increase net assets and retained earnings.C. reduce net assets and retained earnings.D. reduce net assets and increase retained earnings.E. reduce net assets and increase shareholders’ equity.

 

104. A firm must pay all current and previously postponed preferred dividends before it can pay any dividends on common shares, thus the preferred shares have the feature called A. convertible dividend rights.B. noncumulative dividend rights.C. cumulative dividend rights.D. callable dividend rights.E. participating dividend rights.

 

105. Baldwin CorporationExcerpts from the Statement of Financial Position for Baldwin Corporation as of September 30, Year 5, are presented below. 

Cash

$   950,000

Accounts receivable (net)

1,675,000

Inventories

  2,806,000

Total current assets

$5,431,000

 

 

 

Accounts payable

$1,004,000

Accrued liabilities

     785,000

Total current liabilities

$1,789,000

 

 

The Board of directors of Baldwin Corporation met on October 4, Year 5, and declared regular quarterly cash dividends amounting to $750,000 ($0.60 per share). The dividend is payable on October 25, Year 5, to all shareholders of record as of October 12, Year 5.Assume that the only transactions to affect Baldwin Corporation during October Year 5 are the dividend transactions and that the closing entries have been made. (CMA adapted, Dec 89 #15) Refer to the Baldwin Corporation example. Baldwin’s total shareholders’ equity would be A. unchanged by the dividend declaration and decreased by the dividend payment.B. decreased by the dividend declaration and increased by the dividend payment.C. unchanged by either the dividend declaration or the dividend payment.D. decreased by the dividend declaration and unchanged by the dividend payment. E. none of the above

 

106. Baldwin CorporationExcerpts from the Statement of Financial Position for Baldwin Corporation as of September 30, Year 5, are presented below. 

Cash

$   950,000

Accounts receivable (net)

1,675,000

Inventories

  2,806,000

Total current assets

$5,431,000

 

 

 

Accounts payable

$1,004,000

Accrued liabilities

     785,000

Total current liabilities

$1,789,000

 

 

The Board of directors of Baldwin Corporation met on October 4, Year 5, and declared regular quarterly cash dividends amounting to $750,000 ($0.60 per share). The dividend is payable on October 25, Year 5, to all shareholders of record as of October 12, Year 5.Assume that the only transactions to affect Baldwin Corporation during October Year 5 are the dividend transactions and that the closing entries have been made. (CMA adapted, Dec 89 #16) Refer to the Baldwin Corporation example. If the dividend declared by Baldwin Corporation had been a 10 percent stock dividend instead of a cash dividend, Baldwin’s current liabilities would have been A. decreased by the dividend declaration and increased by the dividend distribution.B. unchanged by the dividend declaration and increased by the dividend distribution.C. unchanged by the dividend declaration and decreased by the dividend distribution.D. unchanged by either the dividend declaration or the dividend distribution.E. none of the above.

 

107. Baldwin CorporationExcerpts from the Statement of Financial Position for Baldwin Corporation as of September 30, Year 5, are presented below. 

Cash

$   950,000

Accounts receivable (net)

1,675,000

Inventories

  2,806,000

Total current assets

$5,431,000

 

 

 

Accounts payable

$1,004,000

Accrued liabilities

     785,000

Total current liabilities

$1,789,000

 

 

The Board of directors of Baldwin Corporation met on October 4, Year 5, and declared regular quarterly cash dividends amounting to $750,000 ($0.60 per share). The dividend is payable on October 25, Year 5, to all shareholders of record as of October 12, Year 5.Assume that the only transactions to affect Baldwin Corporation during October Year 5 are the dividend transactions and that the closing entries have been made. (CMA adapted, Dec 89 #17) Refer to the Baldwin Corporation example. If the dividend declared by Baldwin Corporation had been a ten percent stock dividend instead of a cash dividend, Baldwin’s total shareholders’ equity would have been A. decreased by the dividend declaration and increased by the dividend distribution.B. unchanged by the dividend declaration and increased by the dividend distribution.C. increased by the dividend declaration and unchanged by the dividend distribution.D. unchanged by either the dividend declaration or the dividend distribution.E. none of the above

 

108. How would a stock split affect each of the following?                                           Total                                     Stockholders’                  Additional               Assets                Equity                     Paid-In Capital A.  Increase               Increase                 No effectB.  No effect             No effect               No effectC.  No effect             No effect               IncreaseD.  Decrease             Decrease               DecreaseE. None of these choices is correct.

 

109. When a dividend is declared and paid in stock, A. total stockholders’ equity does not change.B. total stockholders’ equity decreases.C. the current ratio increases.D. the amount of working capital decreases.E. None of these choices is correct.

 

110. On September 1, 2013, Marker Corporation declared and issued a 20 percent common stock dividend. Prior to this date, Marker had 20,000 shares of $2 par value common stock that were both issued and outstanding. The market value of Marker’s stock was $20 per share at the time the dividend was issued. As a result of this stock dividend, Marker’s total stockholders’ equity A. decreased by $40,000.B. decreased by $400,000.C. increased by $400,000.D. increased by $40,000.E. did not change.