acct 321_Question

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1) Which of the following
describes a term bond?

A) A bond that repays principal in
installments

B) A bond that gives the
bondholder a claim for specific assets if the issuer fails to pay

C) A bond that matures at one
specified time

D) A bond that is not backed by
specific assets

2) Which of the following
describes a secured bond?

A) A bond that repays principal in
installments

B) A bond that gives the
bondholder a claim for specific assets if the issuer fails to pay

C) A bond that matures at one
specified time

D) A bond that is not backed by
specific assets

3) Which of the following
characteristics is an advantage of the corporate form of business?

A) Higher degree of government
regulation

B) The potential to raise large
amounts of capital

C) Separation of ownership and
management

D) Double taxation

4) On December 2, 2014, Ewell
Company purchases a piece of land from the original owner.In payment for the land, Ewell Company
issues 8,000 shares of common stock with $1.00 par value.The land has been appraised at a
market value of $400,000.The
journal entry to record this transaction would include which of the following
items?

A) Debit Common stock $8,000 and
debit Paid-in capital $392,000.

B) Credit Common stock $8,000 and
credit Paid-in capital $392,000.

C) Credit Common stock $400,000.

D) Debit Cash $400,000.

5)
Please refer to the equity section of the balance sheet shown below:

Preferred stock

$100
par, 10,000 shares authorized, 1,000 shares issued

$100,000

Common stock

$1
par, 500,000 shares authorized, 20,000 shares issued

20,000

Paid-in capital
in excess of par

350,000

Retained
earnings

(74,000)

Total
stockholders’ equity

$396,000

The
amount shown for Retained earnings would be called a(n):

A)
net loss.

B)
earnings shortfall.

C) retained
earnings deficit.

D)
loss on sale of stock.

6)
Please refer to the equity section shown below:

Preferred
stock, $100 par, 4% non-cumulative

$20,000

1,000 shares
authorized, 200 shares outstanding

Common stock,
$0.01 par

400

1,000,000 shares
authorized, 40,000 shares outstanding

Paid-in capital
in excess of par

359,600

Retained
earnings

820,000

Total
stockholders’ equity

$1,200,000

Assume
the preferred shares have no stated liquidation value. The preferred shares are
non-cumulative, so there are no dividends in arrears.

Please
calculate the book value per share of common stock.

A)
$30.00 per share

B)
$8.99 per share

C)
$9.00 per share

D)
$29.50 per share

7) Which of the following is a
reason why a company would do a stock split?

A) To defend against a hostile
takeover

B) To generate additional sales
revenues

C) To reduce the market price at
which the stock is trading

D) To provide the shareholders
with something of value, when the company cannot afford a cash dividend

8) Please refer to the following
information for Peartree Company:

•Common stock, $1.00 par, 100,000
issued, 95,000 outstanding

•Paid-in capital in excess of par:
$2,150,000

•Retained earnings:$910,000

•Treasury stock: 5,000 shares purchased
at $20 per share

If Peartree purchases an
additional 1,000 shares of treasury stock at $18 per share, what journal entry
will be required?

A) Debit Treasury stock $18,000
and credit Retained earnings $18,000.

B) Debit Treasury stock $20,000,
credit Loss on sale $2,000 and credit Cash $18,000.

C) Debit Treasury stock $18,000
and credit Cash $18,000.

D) Debit Cash $18,000 and credit
Treasury stock $18,000.

9) Which of the following would be
a reason for a company to restrict its cash dividends or treasury stock purchases?

A) Because the company needs
treasury stock to offer as performance incentives to upper management

B) In order to give shareholders
stock dividends

C) Due to the desire of
shareholders to retain the company’s earnings for future growth and capital
expenditures

D) Due to requirements of lenders
or creditors that companies maintain enough equity to meet their obligations

10) At January 1, 2014, Foxmore Company had 80,000 shares of
common stock outstanding and no preferred stock. During the year, they
issued 40,000 additional shares of common stock. At December 31, 2014,
Foxmore had 120,000 shares of common stock outstanding, and no preferred
stock. In addition, Foxmore reported the following results for the year
2014:

Sales revenues
from regular business operations

$3,000,000

Cost of goods
sold

900,000

Operating
expenses from their regular business operations

600,000

Gain on
disposal of several items of property, plant & equipment

15,000

Income tax
expense on continuing operations

330,000

Loss on the
termination of a discontinued business segment, net of tax

120,000

Losses on
damage caused by earthquake, net of tax

280,000

At
December 31, 2014, how much is the earnings per share for income (loss) from
continuing operations?

(Please
round all calculations to the nearest cent.)

A)
$(1.20)

B)
$7.85

C)
$10.65

D)
$11.85

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