Question :
131. Gains and losses the purchase and resale of treasury stock : 1245765
131. Gains and losses on the purchase and resale of treasury stock may be reflected only in
A. paid-in capital accounts.
B. paid-in capital and retained earnings accounts.
C. income, paid-in capital, and retaining earnings accounts.
D. income and paid-in capital accounts.
E. None of these answer choices is correct.
132. At the date of the financial statements, common stock shares issued would exceed common stock shares outstanding as a result of the
A. declaration of a stock split.
B. declaration of a stock dividend.
C. purchase of treasury stock.
D. payment in full of subscribed stock.
E. None of these choices is correct.
133. Which of the following is/are an appropriate presentation of treasury stock?
A. As a marketable security
B. As a deduction at cost from total stockholders’ equity
C. As a deduction at cost from total contingent liabilities
D. As a deduction at par from total stockholders’ equity
E. None of these choices is appropriate.
134. The following was abstracted from the accounts of the Anderson Corp. at year-end:
Total income since incorporation ………………….
$420,000
Total cash dividends paid ………………………..
130,000
Proceeds from sale of donated stock ……………….
45,000
Total value of stock dividends distributed …………
30,000
Excess of proceeds over cost of treasury stock sold …
70,000
What should be the current balance of Retained Earnings?
A. $260,000
B. $290,000
C. $305,000
D. $335,000
E. None of these answers is correct.
135. Which of the following is issued to shareholders by a corporation as evidence of the ownership of rights to acquire its unissued or treasury stock?
A. Stock options
B. Stock rights
C. Stock dividends
D. Stock subscriptions
E. None of these choices is correct.
136. (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.
137. In some cases, particularly when the reissue of treasury stock results from the exercise of employee stock options, the amount paid by the firm to reacquire the treasury shares exceeds the subsequent reissue price. If the firm applied the constructive retirement method, it is unlikely that the reissue price would be so low as to require a debit to _____.
A. Additional Paid-In Capital account so long as that account has a sufficiently large credit balance. To the extent the required debit exceeds the credit balance in the Additional Paid-In Capital account, the firm reduces that account to zero and debits the excess to Retained Earnings.
B. Additional Paid-In Capital.
C. Retained Earnings.
D. Net Income.
E. Accumulated Other Comprehensive Income.
138. In what way are stock rights generally different from stock warrants?
A. Stock rights are generally granted to current shareholders only.
B. Stock rights are non-transferable.
C. Stock warrants are only issued with bonds.
D. Stock warrants are only issued with preferred stocks.
E. Rights and warrants differ in no way; they convey the same rights
139. If the accountant cannot objectively measure the value of the stock warrants separately from the value of the bond or preferred stock at date of issuance, the accountant credits
A. the full purchase price to the bond or preferred stock and none of the price to the common stock warrant.
B. 95 percent of the purchase price to the bond or preferred stock and 5 percent of the price to the common stock warrant.
C. 90 percent of the purchase price to the bond or preferred stock and 10 percent of the price to the common stock warrant.
D. 85 percent of the purchase price to the bond or preferred stock and 15 percent of the price to the common stock warrant.
E. 80 percent of the purchase price to the bond or preferred stock and 20 percent of the price to the common stock warrant.
140. (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.
