loader  Loading... Please wait...

Question(s) / Instruction(s):

     91.     The stockholders' equity of Benton Company at July 31, 2007 is presented below:
Common stock, par value $20, authorized 400,000 shares;
     issued and outstanding 160,000 shares     $3,200,000
Paid-in capital in excess of par     160,000
Retained earnings      650,000
          $4,010,000
On August 1, 2007, the board of directors of Benton declared a 15% stock dividend on common stock, to be distributed on September 15th. The market price of Benton's common stock was $35 on August 1, 2007, and $38 on September 15, 2007. What is the amount of the debit to retained earnings as a result of the declaration and distribution of this stock dividend?
a.     $800,000.
b.     $840,000.
c.     $912,000.
d.     $600,000.

     92.     On January 1, 2007, Carl, Inc., declared a 10% stock dividend on its common stock when the market value of the common stock was $20 per share. Stockholders' equity before the stock dividend was declared consisted of:
Common stock, $10 par value, authorized 200,000 shares;
     issued and outstanding 120,000 shares     $1,200,000
Additional paid-in capital on common stock     150,000
Retained earnings      700,000
Total stockholders' equity     $2,050,000
What was the effect on Carl’s retained earnings as a result of the above transaction?
a.     $120,000 decrease
b.     $240,000 decrease
c.     $400,000 decrease
d.     $200,000 decrease

     93.     On January 1, 2007, Golden Corporation had 110,000 shares of its $5 par value common stock outstanding. On June 1, the corporation acquired 10,000 shares of stock to be held in the treasury. On December 1, when the market price of the stock was $8, the corporation declared a 10% stock dividend to be issued to stockholders of record on December 16, 2007. What was the impact of the 10% stock dividend on the balance of the retained earnings account?
a.     $50,000 decrease
b.     $80,000 decrease
c.     $88,000 decrease
d.     No effect

     94.     Kimm, Inc. had net income for 2007 of $2,120,000 and earnings per share on common stock of $5. Included in the net income was $300,000 of bond interest expense related to its long-term debt. The income tax rate for 2007 was 30%. Dividends on preferred stock were $400,000. The payout ratio on common stock was 25%. What were the dividends on common stock in 2007?
a.     $430,000.
b.     $530,000.
c.     $482,500.
d.     $645,000.
     95.     Presented below is information related to Sampson, Inc.:
               December 31,     
           2007           2006     
Common stock     $ 75,000     $ 60,000
4% Preferred stock     350,000     350,000
Retained earnings (includes net income for current year)     90,000     75,000
Net income for year     30,000     32,000
What is Sampson’s rate of return on common stock equity for 2007?
a.     20.0%
b.     10.7%
c.     18.2%
d.     21.3%

Use the following information for questions 96 and 97.

The following data are provided:
          December 31,     
      2007           2006     
10% Cumulative preferred stock, $50 par     $100,000     $100,000
Common stock, $10 par     120,000     90,000
Additional paid-in capital     80,000     65,000
Retained earnings (includes current year net income)     240,000     215,000
Net income     90,000
Additional information:
On May 1, 2007, 3,000 shares of common stock were issued. The preferred dividends were not declared during 2007. The market price of the common stock was $50 at December 31, 2007.

     96.     The rate of return on common stock equity for 2007 is
a.     90 ÷ 400.
b.     90 ÷ 440.
c.     80 ÷ 400.
d.     80 ÷ 440.

     97.     The book value per share of common stock at 12/31/07 is
a.     430 ÷ 12.
b.     200 ÷ 12.
c.     330 ÷ 12.
d.     440 ÷ 11.

Use the following information for questions 98 and 99.

Winger Corporation had the following information in its financial statements for the year ended 2007 and 2008:
Cash Dividends for the year 2008     $ 15,000
Net Income for the year ended 2008     124,000
Market price of stock, 12/31/08     24
Common stockholders’ equity, 12/31/07     2,200,000
Common stockholders’ equity, 12/31/08     2,400,000
Outstanding shares, 12/31/08     120,000
Preferred dividends for the year ended 2008     30,000
     98.     What is the payout ratio for Winger Corporation for the year ended 2008?
a.     12.1%
b.     16.0%
c.     36.3%
d.     41.3%

     99.     What is the book value per share for Winger Corporation for the year ended 2008?
a.     $19.17
b.     $20.00
c.     $10.43
d.     $24.00

Use the following information for questions 100 through 102.

Tomlin, Inc. has outstanding 300,000 shares of $2 par common stock and 60,000 shares of no-par 8% preferred stock with a stated value of $5. The preferred stock is cumulative and nonparticipating. Dividends have been paid in every year except the past two years and the current year.

     *100.     Assuming that $150,000 will be distributed as a dividend in the current year, how much will the common stockholders receive?
a.     Zero.
b.     $78,000.
c.     $102,000.
d.     $126,000.

     *101.     Assuming that $63,000 will be distributed as a dividend in the current year, how much will the preferred stockholders receive?
a.     $21,000.
b.     $24,000.
c.     $48,000.
d.     $63,000.

     *102.     Assuming that $183,000 will be distributed, and the preferred stock is also participating, how much will the common stockholders receive?
a.     $111,000.
b.     $90,000.
c.     $93,000.
d.     $48,000.

     *103.     Wiley, Inc. has 50,000 shares of $10 par value common stock and 25,000 shares of $10 par value, 6%, cumulative, participating preferred stock outstanding. Dividends on the preferred stock are one year in arrears. Assuming that Wiley wishes to distribute $135,000 as dividends, the common stockholders will receive
a.     $30,000.
b.     $55,000.
c.     $80,000.
d.     $105,000.


     *104.     Lott Co. has outstanding 50,000 shares of 8% preferred stock with a $10 par value and 125,000 shares of $3 par value common stock. Dividends have been paid every year except last year and the current year. If the preferred stock is cumulative and nonparticipating and $250,000 is distributed, the common stockholders will receive
a.     $0.
b.     $170,000.
c.     $210,000.
d.     $250,000.

Find Similar Answers by Subject


Student Reviews

Rate and review your solution! (Please rate on a Scale of 1 - 5. Top Rating is 5.)


Expert's Answer
Download Solution:
$3.80

This solution includes:

  • Plain text
  • Cited sources when necessary
  • Attached file(s)
  • Solution Document(s)



Reach Us

408-538-8534

20-3582-4059

39-008-4233

+1-408-904-6494