MGMT 200 EXAM 3 (PURDUE UNIVERSITY) NEWEST 2024 EXAM 3 AND PRACTICE EXAM 300+ QUESTIONS AND CORRECT DETAILED ANSWERS || ALREADY GRADEDA+|| BRAND NEW!!

MGMT 200 EXAM 3 (PURDUE
UNIVERSITY) NEWEST 2024 EXAM
3 AND PRACTICE EXAM 300+
QUESTIONS AND CORRECT
DETAILED ANSWERS || ALREADY
GRADEDA+|| BRAND NEW!!
The Golden, Inc. issues 1,000 shares of 3%, $100 par value
preferred stock at the beginning of 2017. All remaining shares are
common stock. Golden was not able to pay dividends in 2017, but
plans to pay dividends of $10,000 in 2018. Assuming the preferred
stock is noncumulative, how much of the $10,000 dividend will be
paid to preferred stockholders and how much will be paid to
common stockholders in 2018?
a. $10,000 to preferred stockholders and $0 to common
stockholders.
b. $6,000 to preferred stockholders and $4,000 to common
stockholders
c. $3,000 to preferred stockholders and $7,000 to common
stockholders.
d. none to preferred stockholders and $10,000 to common
stockholders - ANSWER-c. $3,000 to preferred stockholders and $7,000 to common
stockholders.
Sharon Textiles Corporation has 1,000 shares of 5%, $100 par
cumulative preferred stock and 25,000 shares of common stock
outstanding. Sharon declared no dividends in 2016 and had no
dividends in arrears prior to 2016. In 2017, Sharon declares a
total dividend of $30,000. How much of the dividends go to the
preferred stockholders?
A. $ ‐ 0 ‐
B. $15,000
C. $10,000
D. $20,000 - ANSWER-10,000
When treasury stock is acquired, what is the effect
on total stockholders' equity?
a.Decrease
b.No effect
c. Increase
d.Cannot tell from the given information - ANSWER-Decrease because cash is used to
purchase the stock
According to generally accepted accounting principles,
treasury stock usually should be recorded at
A. market value.
B. par value.
C. cost.
D. net realizable value. - ANSWER-Cost
When a company purchases treasury shares at $10,000
and then sells the shares at $8,000, the difference of
$2,000
A. is recorded as a loss on the income statement.
B. reduces stockholders' equity.
C. increases stockholders' equity.
D. is recorded as a gain on the income statement. - ANSWER-Reduces stockholders'
equity
When Allegheny Corporation declares a cash dividend
which of the following is true?
A. Allegheny's assets are decreased
B. Stockholders' equity is increased
C. Allegheny's assets are increased
D. Allegheny's liabilities are increased - ANSWER-Liabilities are increased
Accounting for stock splits and large stock dividends
have a different effects on a company's retained
earnings and total stockholders' equity
a) True
b) False - ANSWER-True
The balance of the $.10 par value common stock account for
Leeds Corporation was $5,000,000 before its recent 2‐for 1
stock split. The market price of the stock was $50 per share
before the stock split. What occurred as a result of the stock
split?
A. The balance in the retained earnings account
decreased by the par value of the new shares.
B. The balance in the common stock account was
increased by $5,000,000
C. The market price of the stock dropped to
approximately $40 per share.
D. The market price of the stock dropped to
approximately $25 per share. - ANSWER-The market price per share dropped to about
$25
A stock dividend requires an entry in the accounting
records because stock dividends
A. represent a transfer from retained earnings to
common stock account.
B. increases the stockholders' equity.
C. require a liability to be recorded on the
declaration date.
D. increases assets and equity of the company . - ANSWER-represents a transfer from
retained earnings to common stock account.
A feature common to both stock splits a