Question :
61. Large stock dividends and stock splits issued primarily to: A. Lower the : 1236038
61. Large stock dividends and stock splits are issued primarily to:
A. Lower the trading price of the stock per share.
B. Increase the number of authorized shares.
C. Increase legal capital.
D. Increase the number of outstanding shares.
62. The Common Stock account on a company’s balance sheet is measured as:
A. The number of common shares outstanding x the stock’s par value per share.
B. The number of common shares outstanding x the stock’s current market value per share.
C. The number of common shares issued x the stock’s par value per share.
D. The number of common shares issued x the stock’s current market value per share.
63. The statement of stockholders’ equity shows
A. Only the ending balance in each stockholders’ equity account.
B. How each equity account changed over time.
C. Only the beginning balance in each stockholders’ equity account.
D. Less information than the stockholders’ equity section in the balance sheet.
64. How does the stockholders’ equity section in the balance sheet differ from the statement of stockholders’ equity?
A. The stockholders’ equity section is more detailed than the statement of stockholders’ equity.
B. The stockholders’ equity section shows balances at a point in time, whereas the statement of stockholders’ equity shows activity over a period of time.
C. The stockholders’ equity section shows activity over a period of time, whereas the statement of stockholders’ equity is at a point time.
D. There are no differences between them.
65. Panhandle Corporation was organized on January 3, 2012. The firm was authorized to issue 100,000 shares of $5 par value common stock. During 2012, Panhandle had the following transactions relating to shareholders’ equity:
Issued 30,000 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.
What is total paid-in capital at the end of 2012?
A. $420,000.
B. $370,000.
C. $470,000.
D. $320,000.
66. Roberto Corporation was organized on January 1, 2012. The firm was authorized to issue 100,000 shares of $5 par value common stock. During 2012, 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 2012?
A. $270,000.
B. $300,000.
C. $250,000.
D. $200,000.
67. 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.
68. 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.
69. 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.
70. 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.
71. Financial information for Retro Designs includes the following selected data:
What is the company’s earnings per share?
A. $0.60.
B. $0.71.
C. $0.50.
D. $0.05.
72. Financial information for Retro Designs includes the following selected data:
What is the company’s price-earnings ratio?
A. 20.0.
B. 15.0.
C. 6.9.
D. 0.05.
73. 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.