16. Mendes Charters reported the following information atDecember 31, 2015:
Preferred stock, $100 par, 500 shares authorized, andoutstanding;
cumulative; nonparticipating; callable at par value $50,000
Common stock, $12 par, 50,000shares authorized and outstanding 600,000
Additional paid-incapital--Common 25,000
Retained earnings825,000
Mendesâ total contributed capitalis
a. $ 650,000 b. $ 675,000 c. $1,500,000 d. $ 625,000
17. Which of the following should be considered when a companydecides to declare a cash dividend on common stock?
a. The retained earnings balance only
b. The amount of authorized shares of common stock
c. The book value of the company's stock
d. The cash available and the retained earnings balance
18. The primary reason for a stock split is to
a. distribute cash to the investor.
b. decrease the market value of the stock.
c. decrease the number of shares outstanding.
d. increase the contributed capital of the corporation.
19. Nordic Exports Inc. reported net income of $150,000 for2015, but its cash balance decreased $40,000. Which financialstatement should Nordic Exportsâ management refer to for anexplanation of this situation? a
. Balance Sheet
b. Income Statement
c. Statement of Retained Earnings
d. Statement of Cash Flows
20. The primary purpose of the statement of cash flows is toprovide information about
a. the financial position of the company.
b. the profitability of the company.
c. the investing and financing activities of the company.
d. the cash inflows and outflows of the company.
21. Cash flows from acquiring and disposing of long-term assetsare classified as
a. operating activities.
b. investing activities
. c. financing activities.
d. purchasing activities.
22. Cash flows from borrowing and paying off a 90-day bank loanare classified as
a. operating activities. b. investing activities. c. financingactivities. d. purchasing activities.
23. Cash flows from issuing and repurchasing stock or issuingand repaying (retiring) debt are classified as
a. operating activities. b. investing activities. c. financingactivities. d. borrowing activities.
24. Cash flows from acquiring and selling products areclassified as
a. operating activities. b. investing activities. c. financingactivities. d. distribution activities.
25. Presented below is the operating activities section of thestatement of cash flows for Golden Consulting for 2016:
Operating activities:
Net income $ 92,000
Add: Depreciation 20,000
Decrease in accounts receivable 8,000
__________
$120,000
Deduct: Decrease in accounts payable (6,000)
Net cash inflow from operating activities $114,000
Which method of preparing the operating activities section hasGolden Consulting used?
a. The direct method b. The indirect method c. Either method d.Cannot be determined without further information
16. Mendes Charters reported the following information atDecember 31, 2015:
Preferred stock, $100 par, 500 shares authorized, andoutstanding;
cumulative; nonparticipating; callable at par value $50,000
Common stock, $12 par, 50,000shares authorized and outstanding 600,000
Additional paid-incapital--Common 25,000
Retained earnings825,000
Mendesâ total contributed capitalis
a. $ 650,000 b. $ 675,000 c. $1,500,000 d. $ 625,000
17. Which of the following should be considered when a companydecides to declare a cash dividend on common stock?
a. The retained earnings balance only
b. The amount of authorized shares of common stock
c. The book value of the company's stock
d. The cash available and the retained earnings balance
18. The primary reason for a stock split is to
a. distribute cash to the investor.
b. decrease the market value of the stock.
c. decrease the number of shares outstanding.
d. increase the contributed capital of the corporation.
19. Nordic Exports Inc. reported net income of $150,000 for2015, but its cash balance decreased $40,000. Which financialstatement should Nordic Exportsâ management refer to for anexplanation of this situation? a
. Balance Sheet
b. Income Statement
c. Statement of Retained Earnings
d. Statement of Cash Flows
20. The primary purpose of the statement of cash flows is toprovide information about
a. the financial position of the company.
b. the profitability of the company.
c. the investing and financing activities of the company.
d. the cash inflows and outflows of the company.
21. Cash flows from acquiring and disposing of long-term assetsare classified as
a. operating activities.
b. investing activities
. c. financing activities.
d. purchasing activities.
22. Cash flows from borrowing and paying off a 90-day bank loanare classified as
a. operating activities. b. investing activities. c. financingactivities. d. purchasing activities.
23. Cash flows from issuing and repurchasing stock or issuingand repaying (retiring) debt are classified as
a. operating activities. b. investing activities. c. financingactivities. d. borrowing activities.
24. Cash flows from acquiring and selling products areclassified as
a. operating activities. b. investing activities. c. financingactivities. d. distribution activities.
25. Presented below is the operating activities section of thestatement of cash flows for Golden Consulting for 2016:
Operating activities:
Net income $ 92,000
Add: Depreciation 20,000
Decrease in accounts receivable 8,000
__________
$120,000
Deduct: Decrease in accounts payable (6,000)
Net cash inflow from operating activities $114,000
Which method of preparing the operating activities section hasGolden Consulting used?
a. The direct method b. The indirect method c. Either method d.Cannot be determined without further information
Related questions
Klug Corporation reported the following information at December31, 2013:
| Preferred stock, $10 par, 10,000 shares authorized, issued,and outstanding; cumulative; nonparticipating; callable at parvalue | $100,000 |
| Common stock, $1 par, 500,000 shares authorized | 100,000 |
| Additional paid-in capital - Common | 25,000 |
| Retained earnings | 75,000 |
| Total stockholders' equity | $300,000 |
The total paid in capital is:
Select one:
A. $250,000
B. $ 75,000
C. $225,000
D. $175,000
If a company issues 10,000 shares of $2 par value common stockat a market price of $30 per share, which of the following is thecorrect balance sheet entry?
Select one:
A. Increase cash by $300,000 and increase paid-in capital by$300,000
B. Increase common stock and cash by $20,000
C. Increase cash by $300,000 and increase retained earnings by$300,000
D. Increase revenues by $300,000
| The stockholdersâequity section of Birdman Corp.âs balance sheet at December 31 ispresented here. | |||||||
| Birdman Corp. | |||||||
| Balance Sheet (partial) | |||||||
| Stockholdersâ equity | |||||||
| Paid-incapital | |||||||
| Preferred stock, cumulative,10,000 shares authorized, 6,000 shares issued and outstanding | $ 640,000 | ||||||
| Common stock, no par, 735,776shares authorized, 569,000 shares issued | 2,400,000 | ||||||
| Totalpaid-in capital | 3,040,000 | ||||||
| Retainedearnings | 1,191,000 | ||||||
| Total paid-incapital and retained earnings | 4,231,000 | ||||||
| Less:Treasury stock (5,200 common shares) | 30,933 | ||||||
| Total stockholdersâequity | $4,200,067 | ||||||
| From a review of thestockholdersâ equity section, answer the following questions: | |||||||
| (a) How many shares of commonstock are outstanding? | |||||||
| Common stock outstanding | shares | ||||||
| (b) Assuming there is a statedvalue, what is the stated value of the common stock? | |||||||
| The stated value of the commonstock | per share | ||||||
| (c) What is the par value ofthe preferred stock? | |||||||
| The par value of the preferredstock | per share | ||||||
| (d) If the annual dividend onpreferred stock is $57,600, what is the dividend rate on preferredstock? | |||||||
| The dividend rate | % | ||||||
| (e) If dividends of $74,800were in arrears on preferred stock, what would be the balancereported for retained earnings? | |||||||
| The Retained Earningsbalance | |||||||
The stockholders equity section of Judson Company showed thefollowing:
| Common Stock - $5 par value, 60,000 shares issued andoutstanding | $300,000 |
| Contributed Capital in excess of par value, common stock | 900,000 |
| Retained Earnings | 800,000 |
Judson declared a 10% stock dividend on a day when the market valueof the stock was $15 per share. The stock dividend will:
Select one:
A. Decrease Retained Earnings by $300,000
B. Increase Contributed Capital in excess of par value, CommonStock by $60,000
C. Increase Common Stock by $100,000
D. Increase Total Contributed Capital by $90,000
