Question :
84.Rockmont Corporation decides to issue a 15% stock dividend 20,000 : 1254237
84.Rockmont Corporation decides to issue a 15% stock dividend on 20,000 outstanding shares of $10 stated value common stock. The distribution is made at the time the market value of the stock is $50 a share. How will the entry to record this transaction affect the company’s equity accounts?
A. Option A
B. Option B
C. Option C
D. Option D
85.Chad Associates retained $825,000 of net income in the business in 2013. If $85,000 was appropriated to satisfy the restrictive covenant of a loan agreement, what are the financial statements effects of the appropriation?
A. Option A
B. Option B
C. Option C
D. Option D
86.Frost Corporation reported net income of $65,000 in 2013. The company had 90,000 shares of $12 par value common stock outstanding and a market price of $18 per share. Frost’s price-earnings ratio was closest to:
A. 25:1
B. 2.5:1
C. 16.6:1
D. 1.5:1
87.Blair Wilson is planning to invest in one of the following companies based on their average performance over the past five years, summarized below. If Blair is looking for a company that is likely to achieve rapid growth in revenues and profitability, which one should he choose?
A. Big Bat, Inc.
B. Bug-lite, Inc.
C. Mood-blue, Inc.
D. Jones, Inc.
88.KincoIndustries had net income for the year 2013 of $650,000. Kinco had an average number of shares outstanding at the end of the year of 725,000 shares. The market price of Kinco’s stock on January 1, 2013 was $14 per share. On December 31, 2013, the market price was $16 per share. The price-earnings ratio for Kinco at year end is closest to?
A. 16.9:1
B. 17.78:1
C. 15.7:1
D. None of these is correct
89.On June 10, 2013, Miller Builders, Inc., a publicly traded company, announced that it had been awarded a contract to build a super football stadium at a contract price of $500 million. This contract would increase its projected revenues by 25% over the next three years. Which of the following statements is correct in regards to this announcement?
A. The market price of Miller’s stock will probably be higher on June 11, 2013 than on June 10th.
B. Miller’s net cash flow from operations will increase by 25% over the next three years.
C. Miller’s balance sheet should be increased by $500 million on June 10, 2013 to recognize this contract.
D. Miller’s net income will increase by 25% over the next three years.
90.Which of the following is not a reason why a corporation may choose not to pay dividends?
A. The board and management prefer to reinvest all net income for future growth.
B. The corporation does not have adequate cash.
C. The corporation does not have adequate retained earnings.
D. All of these are valid reasons not to pay dividends.
91.Which of the following would not be a reason for the market price of Richards Corporation to increase?
A. Richards Corp. has had good earnings in the present period.
B. The general condition and future outlook of the economy is good.
C. A sustained increase in key interest rates.
D. Investors believe Richards Corp. will do well in the future.
92.The price-earnings ratio is calculated as:
A. The market value of a company’s stock divided by average earnings over the past three years.
B. The interest rate on borrowed money divided by the current prime rate.
C. The price of a company’s products as compared to its net income.
D. The market price of a share of stock divided by the earnings per share.
