study test need help S The primary purpose of a stock split is to: a increase pa

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study test need help

S The primary purpose of a stock split is to: a increase paid-in capital h reduce the market price of the stock per share e increase the market price of the stock per share d increase retained earnings & The outstanding stock is composed of 10,000 shares of $100 par, cumulative, non- participating preferred 8% stock, and 50,000 shares ofn-par common stock. Preferred dividends have been paid every year except for the preceding two years and the current year Ir $260,000 is to be distributed as a dividend of the current year, what total amount will be distributed to the preferred shareholders? a. SO b S160,000 $240,000 $260,000 7. Which of the following accounts is not reported in the stockholders' equity section of the corporate balance sheet? a. Treasury Stock b. Paid in capital in excess of par - common stock c. Organization Costs d. Preferred Stock 8. The excess of issue price over par of common stock is termed a a. discount b. contra asset c deficit d. premium 9. A corporation has 50,000 shares of S100 par value stock outstanding. If the corporation issues a 5 for I stock split, the number of shares outstanding after the split will be: a 200,000 shares b 50,000 shares c. 250,000 shares d 10,000 shares 10. The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to a decrease total liabilities and stockholders' equity b. increase total expenses and total liabilities c increase total assets and stockholders' equity d decrease total assets and stockholders' equity ACC 102 FINAL EXAM

Explanation / Answer

5) Primary purpose of stock split is reduce market price per share

SO answer is b) Reduce the market price of stock per share

6) Annual preferred dividend = 10000*100*8% = 80000 per share

Dividend paid to preferred dividend = 80000*3 = 240000

So answer is c) $240000

7) Organisation cost is not recorded in stockholder's equity section

So answer is c) Organization cost

8) The excess of issue price over par value is termed as premium

so answer is d) premium

9) Number of share after split = 50000*5 = 250000

So answer is c) 250000 shares

10) The cumulative effect of declaration and payment of dividend is decrease total assets and stockholder's equity

SO answer is d) Decrease total assets and stockholder's equity

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