Question 1 of 37
Kelly Petroleum Products owns furniture that was purchased for $19,600. Accumulated depreciation is $17,300. The furniture was sold for $3,800. Which of the following is the correct entry to record the transaction?
Gain on sale of furniture5,000
Gain on sale of furniture3,800
Gain on sale of furniture1,500
Question 2 of 37
If a corporation issues only one class of stock, it must be:
either common or preferred.
Question 3 of 37
The price that the stockholder pays to acquire stock from the corporation is the:
Question 4 of 37
Treasury stock is a(n):
Question 5 of 37
A company may declare a stock split to:
reduce total equity.
decrease the market value of the stock.
avoid playing a cash dividend.
reduce retained earnings.
Question 6 of 37
The stockholders’ equity section of the balance sheet for Minturn Mine Corporation is shown below:
Preferred stock, 7%, $50 par value, 10,000 shares authorized, 7,000 shares issued, redemption value $56 per share$350,000
Paid-in capital in excess of par value-preferred50,000
Common stock, $10 par value, 50,000 shares authorized, 18,000 shares issued180,000
Paid-in capital in excess of par value-common20,000
Total Paid-in capital$600,000
Total stockholders’ equity$900,000
Assume there are 2 years’ dividends in arrears on the preferred stock, including the current year. The book value per share for preferred stock is:
Question 7 of 37
An investor who wishes to know whether a company is successful in using its assets to earn income for the individuals who finance the business should review the:
earnings per share.
return on assets.
times-interest ratio earned.
return on equity.
Question 8 of 37
Return on equity is a ratio that:
a) cannot be calculated if the company has preferred stock in addition to common stock.
b) is calculated by dividing net income plus preferred dividends by average common stockholders’ equity.
c) shows the relationship between net income available for common stockholders and average common stockholders’ equity.
d) Both A and B are correct.
Question 9 of 37
Which of the following are included in the cost of land?
The cost of paving
The cost of fencing
The cost of clearing the land
The cost of outdoor lighting
Question 10 of 37
Which of the following is included in the cost of a plant asset?
Amounts paid to ready the asset for its intended use
The purchase price of the plant asset
The taxes paid
All of the above
Question 11 of 37
Which of the following depreciation methods allocates an equal amount of depreciation to each year?
All of the above