61) Following is the shareholders' equity section of the balance sheet of the Everslim Corporation:
Share capital:
Common shares, 100,000 shares authorized,
65,000 shares issued $650,000
Total share capital$650,000
Retained earnings 349,000
Total shareholders' equity$999,000
The common shares are currently selling for $15.50 per share.
The balance in the Common Shares account after the distribution of a 15% common stock dividend is:
A) $650,000
B) $747,500
C) $801,125
D) $1,150,125
62) Dividends in arrears on preferred shares are reported as a:
A) current liability on the balance sheet
B) footnote to the financial statements
C) reduction in retained earnings
D) current asset on the balance sheet
63) The market price of a share of Omega 3 Company common shares is $110. If Omega 3 Company declares and issues a 30% stock dividend, the market price will, in theory, adjust to approximately:
A) $33
B) $70
C) $85
D) $143
64) For a company that has only common shares outstanding, dividing total shareholders' equity by the number of shares outstanding determines the:
A) liquidation value per share
B) earnings per share
C) market value per share
D) book value per share
65) When a company has both common shares and preferred shares, the book value per common share is calculated by:
A) dividing total shareholders' equity less preferred equity by the number of common shares outstanding
B) dividing the amount in the common shares account by the number of common shares outstanding
C) dividing total shareholders' equity by the number of common shares outstanding
D) dividing the amount in the common shares account by the sum of the number of common shares and preferred shares outstanding
66) The price the corporation agrees to pay to repurchase its preferred shares, which is set when the shares is issued, is called the:
A) par value
B) fair market value
C) redemption value
D) book value
67) The shareholders' equity section of the balance sheet for Vivitas Stevia Corporation is shown below:
Share capital:
Preferred shares, 10,000 shares authorized,
7,000 shares issued of $3.50 preferred,
redemption value $56 per share$350,000
Common shares, 50,000 shares authorized,
18,000 shares issued180,000
Total share capital$530,000
Retained earnings300,000
Total share capital$830,000
Assume there are 2 years' dividends in arrears on the preferred shares, including the current year. The book value per share for preferred shares is:
A) $57.00
B) $60.50
C) $63.00
D) $66.50
68) The shareholders' equity section of the balance sheet for Vivitas Stevia Corporation is shown below:
Share capital:
Preferred shares, 10,000 shares authorized,
7,000 shares issued of $3.50 preferred,
redemption value $56 per share$350,000
Common shares, 50,000 shares authorized,
18,000 shares issued 180,000
Total share capital$530,000
Retained earnings 300,000
Total share capital$830,000
Assume there are 2 years' dividends in arrears on the preferred shares, including the current year. the book value per share for Vivitas Stevia common shares is:
A) $21.61
B) $25.50
C) $26.47
D) $26.67
69) Preferred book value is calculated by:
A) dividing total preferred equity less dividends in arrears by the number of preferred shares outstanding
B) dividing total preferred equity plus dividends in arrears by the number of preferred shares outstanding
C) dividing total preferred equity plus dividends in arrears by the number of preferred and common shares outstanding
D) dividing total preferred equity plus dividends in arrears by the number of common shares outstanding
70) Which of the following is the best measure as to whether a company is successful in using its assets to earn income for the individuals who finance the business?
A) current ratio
B) acid-test ratio
C) return on equity
D) return on assets