Intermediate II - Name Date 1 Participating preferred stock...

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Name: __________________________ Date: _____________ 1. Participating preferred stock requires that if a company fails to pay a dividend in any year, it must make it up in a later year before paying any common dividends. A) True B) False 2. The cumulative feature of preferred stock A) limits the amount of cumulative dividends to the par value of the preferred stock. B) requires that dividends not paid in any year must be made up in a later year before dividends are distributed to common shareholders. C) means that the shareholder can accumulate preferred stock until it is equal to the par value of common stock at which time it can be converted into common stock. D) enables a preferred stockholder to accumulate dividends until they equal the par value of the stock and receive the stock in place of the cash dividends. 3. How should a "gain" from the sale of treasury stock be reflected when using the cost method of recording treasury stock transactions? A) As ordinary earnings shown on the income statement. B) As paid-in capital from treasury stock transactions. C) As an increase in the amount shown for common stock. D) As an extraordinary item shown on the income statement. 4. An entry is not made on the A) date of declaration. B) date of record. C) date of payment. D) An entry is made on all of these dates. 5. What effect does the issuance of a 2-for-1 stock split have on each of the following? Par Value per Share Retained Earnings A) No effect No effect B) Increase No effect
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C) Decrease No effect D) Decrease Decrease Use the following to answer questions 6-7: Presented below is information related to Hale Corporation: Common Stock, $1 par $4,300,000 Paid-in Capital in Excess of Par—Common Stock 550,000 Preferred 8 1/2% Stock, $50 par 2,000,000 Paid-in Capital in Excess of Par—Preferred Stock 400,000 Retained Earnings 1,500,000 Treasury Common Stock (at cost) 150,000 6. The total paid-in capital related to the common stock is A) $4,300,000. B) $4,850,000. C) $5,250,000. D) $4,700,000. 7. The total stockholders' equity of Hale Corporation is A) $8,600,000. B) $8,750,000. C) $7,100,000. D) $7,250,000. 8. Glavine Company issues 6,000 shares of its $5 par value common stock having a market value of $25 per share and 9,000 shares of its $15 par value preferred stock having a market value of $20 per share for a lump sum of $288,000. The proceeds allocated to the common stock is A) $30,000 B) $130,909 C) $150,000 D) $157,091
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9. An analysis of stockholders' equity of Hahn Corporation as of January 1, 2010, is as follows: Co m mo n sto ck, par val ue $2 0; aut hor ize d 10 0,0 00 sha res; iss ued and out sta ndi ng 90, 00 0 sha res $1, 80 0,0 00 Pai d-
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A) $895,000 B) $900,000 C) $905,000 D) $915,000 10. Anders, Inc., has 5,000 shares of 5%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2011. There were no dividends declared in 2009. The board of directors declares and pays a $45,000
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This note was uploaded on 03/16/2011 for the course ACCTG 2302 taught by Professor Smith during the Spring '11 term at University of Houston.

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Intermediate II - Name Date 1 Participating preferred stock...

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