Stockholders Equity MCQs

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East Co. issued 1,000 shares of its $5 par common stock to Howe as compensation for 1,000 hours of legal services performed. Howe usually bills $160...






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On July 1, year 1, Cove Corp., a closely held corporation, issued 6% bonds with a maturity value of $60,000, together with 1,000 shares of its $5 pa...






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Beck Corp. issued 200,000 shares of common stock when it began operations in year 1 and issued an additional 100,000 shares in year 2. Beck also iss...






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A corporation was organized in January year 1 with authorized capital of $10 par value common stock. On February 1, year 1, shares were issued at pa...






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During year 1, Brad Co. issued 5,000 shares of $100 par convertible preferred stock for $110 per share. One share of preferred stock can be converte...






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Quoit, Inc. issued preferred stock with detachable common stock warrants. The issue price exceeded the sum of the warrants fair value and the prefe...






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Blue Co. issued preferred stock with detachable common stock warrants at a price that exceeded both the par value and the market value of the prefer...






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When collectibility is reasonably assured, the excess of the subscription price over the stated value of the no par common stock subscribed should b...






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On December 1, year 1, shares of authorized common stock were issued on a subscription basis at a price in excess of par value. A total of 20% of th...






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Cyan Corp. issued 20,000 shares of $5 par common stock at $10 per share. On December 31, year 1, Cyans retained earnings were $300,000. In March ye...






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At December 31, year 1, Rama Corp. had 20,000 shares of $1 par value treasury stock that had been acquired in year 1 at $12 per share. In May year 2...






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Victor Corporation was organized on January 2, year 1, with 100,000 authorized shares of $10 par value common stock. During year 1 Victor had the fo...






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Victor Corporation was organized on January 2, year 1, with 100,000 authorized shares of $10 par value common stock. During year 1 Victor had the fo...






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In year 1, Rona Corp. issued 5,000 shares of $10 par value common stock for $100 per share. In year 3, Rona reacquired 2,000 of its shares at $150 p...






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On December 31, year 1, Pack Corp.s board of directors canceled 50,000 shares of $2.50 par value common stock held in treasury at an average cost o...






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In year 1, Fogg, Inc. issued $10 par value common stock for $25 per share. No other common stock transactions occurred until March 31, year 3, when ...






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At December 31, year 1, Eagle Corp. reported $1,750,000 of appropriated retained earnings for the construction of a new office building, which was c...






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A retained earnings appropriation can be used to






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In connection with a stock option plan for the benefit of key employees, Ward Corp. intends to distribute treasury shares when the options are exerc...






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On January 2, year 1, Kine Co. granted Morgan, its president, compensatory stock options to buy 1,000 shares of Kines $10 par common stock. The opt...






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On January 2, year 1, Kine Co. granted Morgan, its president, compensatory stock options to buy 1,000 shares of Kines $10 par common stock. The opt...






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On January 2, year 1, Morey Corp. granted Dean, its president, 20,000 stock appreciation rights for past services. Those rights are exercisable imme...






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In accounting for stock-based compensation, what interest rate is used to discount both the exercise price of the option and the future dividend str...






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In what circumstances is compensation expense immediately recognized?






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Compensation cost for a share-based payment to employees that is classified as a liability is measured as






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What is the measurement date for a share-based payment to employees that is classified as a liability?






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Shafer Corporation (a nonpublic company) established an employee stock option plan on January 1, year 1. The plan allows its employees to acquire 20...






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Galaxy has a tax benefit and cash retained of $20,000 as a result of share-based payments to employees. How is this tax benefit disclosed in the fin...






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On July 1, year 1, Jordan Corp. granted employees sharebased payments in the form of compensatory stock options. How should Jordan account for the o...






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The following information pertains to Jet Corp.s outstanding stock for year 1: Common stock, $5 par value Shares outstanding, 1/1/Y1 20,000 2-for...






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Earnings per share data must be reported on the income statement for Cumulative effect of a change in accounting principle Extraordinary items






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On January 31, year 2, Pack, Inc. split its common stock 2 for 1, and Young, Inc. issued a 5% stock dividend. Both companies issued their December 3...






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Mann, Inc. had 300,000 shares of common stock issued and outstanding at December 31, year 1. On July 1, year 2, an additional 50,000 shares of commo...






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West Co. had earnings per share of $15.00 for year 1 before considering the effects of any convertible securities. No conversion or exercise of conv...






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In determining diluted earnings per share, dividends on nonconvertible cumulative preferred stock should be






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The if-converted method of computing earnings per share data assumes conversion of convertible securities as of the






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In determining earnings per share, interest expense, net of applicable income taxes, on convertible debt that is dilutive should be






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Seco Corp. was forced into bankruptcy and is in the process of liquidating assets and paying claims. Unsecured claims will be paid at the rate of 40...






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Kamy Corp. is in liquidation under of the Federal Bankruptcy Code. The bankruptcy trustee has established a new set of books for the bankruptcy esta...






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On December 30, year 1, Hale Corp. paid $400,000 cash and issued 80,000 shares of its $1 par value common stock to its unsecured creditors on a pro ...






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The primary purpose of a quasi reorganization is to give a corporation the opportunity to






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When a company goes through a quasi reorganization, its balance sheet carrying amounts are stated at






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The stockholders equity section of Brown Co.s December 31, year 1 balance sheet consisted of the following: Common stock, $30 par, 10,000 shares ...






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On July 1, year 1, Vail Corp. issued rights to stockholders to subscribe to additional shares of its common stock. One right was issued for each sha...






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In September year 1, West Corp. made a dividend distribution of one right for each of its 120,000 shares of outstanding common stock. Each right was...






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On November 2, year 1, Finsbury, Inc. issued warrants to its stockholders giving them the right to purchase additional $20 par value common shares a...






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A company issued rights to its existing shareholders to purchase, for $30 per share, unissued shares of $15 par value common stock. Additional paid-...






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On January 1, year 1, Fay Corporation established an employee stock ownership plan (ESOP). Selected transactions relating to the ESOP during year 1 ...






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Logan Corporation issues convertible bonds for $500,000. At the date of issuance, it is determined that the fair value of the bonds is $480,000. Log...






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Vestre Corporation prepares its financial statements under IFRS. Recently the company issued convertible debt. How should the company record this de...






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Under IFRS, which of the following is not a method that may be used to account for treasury stock?






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The market for outstanding, listed common stock is called the






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In capital markets, the primary market is concerned with






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Which of the following is usually not a feature of cumulative preferred stock?






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Which of the following is not an advantage of going public?






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Which of the following is not an advantage of going public?






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Which of the following does NOT describe an area of specialization in the venture capital industry?






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What is the practice of buying non-financial companies by financial institutions called?






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What are the return patterns for leveraged buyouts (LBOs) shown to exhibit?






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A private equity transaction where an investor or group of investors bargain directly with a public company to acquire an equity position is known as...






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Which of the following is TRUE of mezzanine financing?






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Under the rules of priority with respect to security holders, whose claims (from the choices below) are first to be satisfied?





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Which of the following is most accurate regarding club deals in the LBO market?






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Which of the following describes the J Curve effect in the life cycle of the venture capital firm?






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How can typical fees for venture capital funds be described?






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What characteristic allows the mezzanine investor to purchase the senior debt once it has been repaid to a certain level?






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Which statement most accurately describes the committed capital to leveraged buyouts in the U.S. from 1990-2008?






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The risk and return spectrum for private equity can best be described by which of the following statements?






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“Direct secondaries” in the private equity market can most accurately be described by which of the following statements?