236.Wheeler Company reports the following amounts for 2014.
Net income $ 150,000
Average shareholders’ equity1,000,000
Preference dividends26,000
Par value preference shares200,000
The 2014 rate of return on ordinary shareholders’ equity is
a.18.8%
b.15.5%
c.15.0%
d.12.4%
237.The governments of many countries require corporations to restrict retained earnings for
a.the cost of treasury shares purchased.
b.dividends in arrears.
c.future plant expansion.
d.loan payments due within the next 12 months.
238.Ordinary share dividends distributable
a.is a contra equity account.
b.is a current liability.
c.is reported as an addition to equity under Share capital–ordinary.
d.reduces total equity.
239.Oxford Inc. was authorized to issue 100,000 £10 par value ordinary shares. As of December 31, 2014, the company had issued 44,000 shares at an average price of £22 per share. During 2014, the company felt that the shares were undervalued so it purchased 10,000 treasury shares at £18 per share. When the share price rebounded later in the year, the company sold 4,000 of the treasury for £25. Retained earnings was £1,658,000 at December 31, 2014.
The amount of Share Premium reported on the December 31, 2014 statement of financial position is
a.£280,000.
b.£528,000.
c.£556,000.
d.£968,000.
240.Oxford Inc. was authorized to issue 100,000 £10 par value ordinary shares. As of December 31, 2014, the company had issued 44,000 shares at an average price of £22 per share. During 2014, the company felt that the shares were undervalued so it purchased 10,000 treasury shares at £18 per share. When the share price rebounded later in the year, the company sold 4,000 of the treasury for £25. Retained earnings was £1,658,000 at December 31, 2014.
Total equity at December 31, 2014 is
a.£2,446,000.
b.£2,518,000.
c.£2,546,000.
d.£2,762,000.
241.Tang Inc. was authorized to issue 500,000 ¥1,000 par value ordinary shares. As of December 31, 2014, the company had issued 80,000 shares for proceeds of ¥198,000,000. During 2014, the company purchased 10,000 treasury shares at a total cost of ¥22,000,000. Later in the year, the company sold half of the treasury shares for ¥14,300,000. The balance in retained earnings at December 31, 2014 was ¥324,000,000.
The amount of Share Premium reported on the December 31, 2014 statement of financial position is
a.¥3,300,000.
b.¥7,700,000.
c.¥118,000,000.
d.¥121,300,000.
242.Tang Inc. was authorized to issue 500,000 ¥1,000 par value ordinary shares. As of December 31, 2014, the company had issued 80,000 shares for proceeds of ¥198,000,000. During 2014, the company purchased 10,000 treasury shares at a total cost of ¥22,000,000. Later in the year, the company sold half of the treasury shares for ¥14,300,000. The balance in retained earnings at December 31, 2014 was ¥324,000,000
Total equity at December 31, 2014 is
a.¥96,800,000.
b.¥514,300,000.
c.¥522,000,000.
d.¥533,000,000.
243.Tang Inc. was authorized to issue 500,000 ¥1,000 par value ordinary shares. As of December 31, 2014, the company had issued 80,000 shares for proceeds of ¥198,000,000. During 2014, the company purchased 10,000 treasury shares at a total cost of ¥22,000,000. Later in the year, the company sold half of the treasury shares for ¥14,300,000. The balance in retained earnings at December 31, 2014 was ¥324,000,000
The balance in the Treasury Shares account reported on the December 31, 2014 statement of financial position is
a.¥3,300,000.
b.¥11,000,000.
c.¥14,300,000.
d.¥22,000,000.
244.Van Luther Company had total equity of £8,650,000 at January 1, 2014 and £9,807,000 at December 31, 2014. The Company had net income for 2014 of £2,335,500 and paid total dividends of £600,000, including the annual preference dividend of £480,000. Van Luther's return on equity for 2014 is
a.18.8%.
b.20.1%.
c.23.8%.
d.25.4%.
245.EI Greco Corporation's January 1, 2014 retained earnings balance was €1,850,000. EI Greco earned net income for the year €510,000 and paid total dividends of €210,000. The company discovered in early 2014 that depreciation expense had been understated by €50,000 in 2013 financial statements. The December 31, 2014 retained earnings balance is
a.€1,640,000.
b.€2,100,000.
c.€2,150,000.
d.€2,200,000.
a