Question :
201. Landau CorporationExcerpts from the Statement of Financial Position for Landau : 1230401
201. Landau CorporationExcerpts from the Statement of Financial Position for Landau 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 Landau 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 Landau 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 Landau Corporation example. Landau’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
202. Landau CorporationExcerpts from the Statement of Financial Position for Landau 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 Landau 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 Landau 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 Landau Corporation example. If the dividend declared by Landau Corporation had been a 10 percent stock dividend instead of a cash dividend, Landau’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.
203. Landau CorporationExcerpts from the Statement of Financial Position for Landau 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 Landau 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 Landau 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 Landau Corporation example. If the dividend declared by Landau Corporation had been a ten percent stock dividend instead of a cash dividend, Landau’s total shareholders’ equity would have been A. decreased by the dividend declaration and increased by the dividend distributionB. unchanged by the dividend declaration and increased by the dividend distributionC. increased by the dividend declaration and unchanged by the dividend distributionD. unchanged by either the dividend declaration or the dividend distribution E. none of the above
204. A stock dividend indicates A. a permanent commitment of assets generated by reinvested earnings.B. an increase to total owners’ equity.C. an attempt to shift the control of the company by diluting ownership.D. a transfer of corporate assets to shareholders without using cash.E. a temporary commitment of assets generated by reinvested earnings.
205. A firm may postpone or omit A. mortgage payments.B. preferred dividend payments. C. bond payments.D. loan payments.E. debenture payments.
206. (CMA adapted, Jun 88 #19) Which one of the following items would likely increase earnings per share (EPS) of a corporation? A. purchase of treasury stock.B. declaration of a stock split.C. declaration of a stock dividend.D. an increase in the common stock shares authorized to be issued.E. an increase in the preferred stock shares authorized to be issued.
207. How would total stockholders’ equity be affected by the declaration of each of the following? Stock Stock Dividend Split A. No effect IncreaseB. Increase DecreaseC. Decrease DecreaseD. No effect No effectE. Decrease Increase
208. On September 30, PMM Corporation declared and issued a 10% common stock dividend. Prior to this dividend, PMM had 50,000 shares of $5 par value common stock issued and outstanding. The fair value of PMM’s common stock was $52 per share on September 30. As a result of this stock dividend, PMM’s total stockholders’ equity A. increased by $25,000.B. decreased by $25,000.C. increased by $260,000.D. decreased by $260,000.E. did not change
209. (CMA adapted, Dec 89 #8) On January 1, Year 1, Toga Corporation granted stock options to top management. The options were exercisable within 4 years from the date of grant only if the employee was still in Toga’s employ. When computing year-end earnings per share at December 31, Year 1, Toga should A. exclude the options until the year they are exercisable.B. include the options in diluted earnings per share if they are dilutive .C. include the options in diluted earnings per share if they are antidilutive.D. ignore the options because they are not considered common stock equivalents.E. recognize the value of the options each year in the income statement until they are exercised.
