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ACC 423 – Final Exam Section A - .50 points Consider each of the numbered statements. You are to decide whether it: A. Applies to both stock dividends and stock splits. B. Applies to neither. C. Applies to stock splits only. D. Applies to stock dividends only. E. Applies to stock splits effected in the form of a dividend only. F. Applies to both stock splits effected in the form of a dividend and a stock dividend. (In each instance, the issuing company has only one class of stock.) Statements ____ 1. The distribution is a multiple as contrasted to a fraction of the number of shares previously outstanding. ____ 2. The total number of shares outstanding is increased. ____ 3. The individual stockholder's share of net assets is increased. ____ 4. There is no transfer between retained earnings and capital stock accounts, other than to the extent occasioned by legal requirements. ____ 5. There is no change in the total stockholders' equity of the issuing corporation. Section B - .50 points Indicate which of the following securities would be included in the computation of "basic earnings per share," and which would be included in the computation of "diluted earnings per share." Place a " B " before those which affect only basic EPS, a " D " before those which affect only diluted EPS, a " BD " before those which affect both basic and diluted EPS, and an " N " before those securities which do not affect EPS computations. Assume that, where applicable, the appropriate securities are dilutive. ____ 1. Warrants to purchase additional common shares. ____ 2. Common stock. ____ 3. Nonconvertible debenture bonds. ____ 4. Convertible preferred stock. ____ 5. Cumulative, nonconvertible preferred stock. ____ 6. Convertible bonds.
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Section C - .50 points Indicate the effect of each of the following transactions on total stockholders' equity – Increase, Decrease, No Effect. ___ 1. Treasury stock is resold at more than cost. ___ 2. Operating loss for the period. ___ 3. Retirement of bonds payable at more than book value. ___ 4. Declaration of a stock dividend. ___ 5. Acquisition of machinery for common stock. ___ 6. Conversion of bonds payable into common stock. Multiple Choice Questions - .50 points each 1.Diamond’s Corporation has an investment in 5,000 shares of Sigmond Company common stock with a cost of $218,000. These shares are used in a property dividend to stockholders of Diamond’s. The property dividend is declared on May 25 and scheduled to be distributed on July 31 to stockholders of record on June 15. The market value per share of Sigmond stock is $63 on May 25, $66 on June 15, and $68 on July 31. The net effect of this property dividend on retained earnings is a reduction of a. $340,000. b. $330,000.
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This note was uploaded on 11/05/2009 for the course ACC ACC 423 taught by Professor Pauldommes during the Spring '09 term at University of Phoenix.

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view-attachment.jspa - ACC 423 Final Exam Section A - .50...

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