Question : 31. Lakeside Company has not declared nor paid dividends its cumulative : 1245786

31. Lakeside Company has not declared nor paid dividends on its cumulative preferred stock in the last three years. These dividends should be reported 
A. in a note to the financial statements.
B. as a reduction in stockholders’ equity.
C. as a current liability.
D. as a noncurrent liability.
E. None of these choices is correct.

32. The par value of common stock represents the 
A. liquidation value of the stock.
B. book value of the stock.
C. legal nominal value assigned to the stock.
D. amount received by the corporation when the stock was originally issued.
E. None of these choices is correct.

33. Earnings per share equals  
A. net income attributable to bonds and common and preferred stock divided by the weighted average number of common shares outstanding during the period.
B. net income attributable to common and preferred stock divided by the weighted average number of common shares outstanding during the period.
C. net income attributable to common and preferred stock divided by the end of period number of common shares outstanding.
D. net income attributable to common stock divided by the weighted average number of common shares outstanding during the period.
E. net income attributable to common stock divided by the end of period number of common shares outstanding.

34. Which of the following shareholder rights is most commonly enhanced in an issue of preferred stock? 
A. The right to vote for the board of directors.
B. The right to maintain one’s proportional interest in the corporation.
C. The right to receive a full cash dividend before dividends are paid to other classes of stock.
D. The right to vote on major corporate issues.
E. The right to transfer dividend revenue to common shareholders.

35. Book value per common share equals  
A. total common shareholders’ equity divided by the number of shares outstanding on the date of the balance sheet.
B. total common shareholders’ equity divided by the weighted-average number of shares outstanding during the accounting period.
C. total common shareholders’ equity divided by the number of shares outstanding on the beginning date of the income statement.
D. total shareholders’ equity divided by the number of shares outstanding on the date of the balance sheet.
E. total shareholders’ equity divided by the weighted-average number of shares outstanding during the accounting period.

36. Earnings per share tells the shareholder the amount of 
A. cash generated per share of common stock.
B. dividends earned by each common shareholder.
C. dividend per share of common stock.
D. income per share as if preferred stock dividends had been paid.
E. income per share as if common and preferred stock dividends had been paid.

37. A firm with securities outstanding that holders can convert into, or exchange for, shares of common stock may report two earnings-per-share amounts:  
A. primary and diluted earnings per share.
B. basic and diluted earnings per share.
C. primary and secondary earnings per share.
D. basic and secondary earnings per share.
E. primary and decreased earnings per share.

38. Firms with convertible preferred stock or other potentially dilutive securities outstanding 
A. must present dual earnings-per-share amounts.
B. calculate basic earnings per share by taking net income attributable to common stock and dividing by the average number of common shares outstanding during the period.
C. calculate diluted earnings per share when a firm has securities outstanding that, if exchanged for common stock would decrease basic earnings per share by 3 percent or more.
D. all of the above
E. none of the above

39. The shareholders’ equity section of the balance sheet reports the sources of financing provided by preferred and common shareholders and their claims on the net assets of the firm. Which of the following is/are true? 
A. The equity of the preferred shareholders usually approximates the liquidation value of the preferred shares.
B. The equity of the preferred shareholders equals the sum of the amounts appearing in the Preferred Stock, Additional Paid-In Capital, Retained Earnings, Accumulated Other Comprehensive Income, Treasury Stock, and other preferred shares equity accounts. 
C. The equity of the preferred shareholders equals the sum of the amounts appearing in the Preferred Stock, Additional Paid-In Capital, and Retained Earnings accounts, only.
D. The equity of the preferred shareholders equals the sum of the amounts appearing in the Preferred Stock and Additional Paid-In Capital accounts, only.
E. The equity of the preferred shareholders equals the amounts appearing in the Preferred Stock account, only.

40. If the firm becomes insolvent, in order to settle debts creditors can claim 
A. the assets of the corporate entity.
B. the owners’ business and personal assets of partnerships.
C. the owner’s business and personal assets of sole-proprietorships.
D. all of the above.
E. none of the above.