11) C-series Corporation's net income for the year ending on December 31, 2010, was $365,000. At the end of 2010, the corporation had outstanding 4,000 shares of $10 nonconvertible preferred shares and 10,000 common shares issued at $20. No shares were issued or retired during 2010. The numerator to be used in the earnings-per-share calculation is:
A) $365,000
B) $350,000
C) $325,000
D) $750,000
12) If a corporation has issued either nonconvertible preferred shares or nonconvertible bonds, it must present:
A) only basic earnings per share
B) only diluted earnings per share
C) either basic or diluted earnings per share
D) both basic and diluted earnings per share
13) The actual market value of a corporation can be calculated by:
A) dividing the current market price per share by the shares outstanding
B) dividing the shares outstanding by the current market price per share
C) multiplying the shares outstanding times the current market price per share
D) subtracting the current market price per share from the shares outstanding
14) An estimate of the value of a corporation's common shares can be calculated by:
A) dividing the investment capitalization rate by the estimated annual earnings per share
B) dividing the investment capitalization rate by the estimated annual income in the future
C) multiplying the estimated annual income in the future by the investment capitalization rate
D) dividing the estimated annual earnings per share by the investment capitalization rate
15) Traxx Corporation reports net income for 2011 of $460,000. Traxx Corporation had 10,000 shares of $10 preferred shares outstanding for all of 2011. Traxx Corporation also had 50,000 common shares issued at $10 outstanding for all of 2011. Earnings per share is:
A) $6.00
B) $6.67
C) $7.20
D) $8.00
16) Taxable income is found on the:
A) income statement
B) balance sheet
C) tax return
D) retained earnings statement
17) Pretax accounting income is found on the:
A) income statement
B) balance sheet
C) tax return
D) retained earnings statement
18) When pretax accounting income exceeds taxable income:
A) Prepaid Income Tax is debited
B) Prepaid Income Tax is credited
C) Future Tax Liability is credited
D) Future Tax Asset is debited
19) When income tax payable exceeds income tax expense:
A) Accumulated Income Tax is debited
B) Prepaid Income Tax is credited
C) Future Tax Liability is credited
D) Future Tax Asset is debited
20) Income tax expense is based on ________ from the income statement while income tax payable is based on ________ from the income tax return.
A) net income, taxable income
B) taxable income, net income
C) pretax accounting income, taxable income
D) taxable income, pretax accounting income