Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Chapter 8, Problem 8MCQ
To determine
Describe the treatment for the extra amount raised from the reissue of
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With its earnings, a firm has a decision to make about whether to pay common dividends or
a. pay depreciation expense on its fixed assets
b. pay preferred dividends
c. pay interest to bondholders
d. reinvest for future growth
On the income statement, interest expense is a. after-tax b. tax-deductible preferred dividents are a. tax-deductible b.
after-tax
and common dividends are a. after-tax b. tax-deductible
Wages are considered a(n)
a. an interest expense
b. a depreciation expense
c. a cost of good sold
d. a research and development expense
e. an operating expense
A company usually expenses (
) when it incurs them, because the future benefits that this spending is
expected to bring are very uncertain and difficult to time.
a. a depreciation expense
b. an interest expense
c. a cost of goods sold
d. an operating expense
e. a research and development expense
When treasury shares are resold at a price above cost:
a. Paid-in capital is reduced. b. Paid-in capital is increased.c. Retained earnings is always increased.d. A gain is reported in the income statement
A stock dividend a. increases the debt to equity ratio of a firm. b. decreases future earnings per share. c. decreases the size of the firm. d. increases shareholders’ wealth.
Chapter 8 Solutions
Financial Accounting
Ch. 8 - Prob. 1YTCh. 8 - Prob. 2YTCh. 8 - Prob. 3YTCh. 8 - Prob. 4YTCh. 8 - 1. Compare a stock split and a stock dividend. 2....Ch. 8 - Prob. 6YTCh. 8 - Prob. 1QCh. 8 - Prob. 2QCh. 8 - Prob. 3QCh. 8 - Prob. 4Q
Ch. 8 - Prob. 5QCh. 8 - Prob. 6QCh. 8 - Prob. 7QCh. 8 - Prob. 8QCh. 8 - Prob. 9QCh. 8 - Prob. 10QCh. 8 - Prob. 11QCh. 8 - Would treasury stock be considered authorized,...Ch. 8 - Prob. 13QCh. 8 - Prob. 14QCh. 8 - Prob. 15QCh. 8 - What are the two sections of the shareholders...Ch. 8 - Prob. 17QCh. 8 - Prob. 18QCh. 8 - Prob. 19QCh. 8 - Prob. 1MCQCh. 8 - Prob. 2MCQCh. 8 - Treasury stock is a. a companys own stock that it...Ch. 8 - Prob. 4MCQCh. 8 - Prob. 5MCQCh. 8 - Prob. 6MCQCh. 8 - The number of shares of stock designated as issued...Ch. 8 - Prob. 8MCQCh. 8 - Prob. 9MCQCh. 8 - Prob. 10MCQCh. 8 - Prob. 1SEACh. 8 - Prob. 2SEACh. 8 - Prob. 3SEACh. 8 - Prob. 4SEACh. 8 - Prob. 5SEACh. 8 - Prob. 6SEACh. 8 - Prob. 7SEACh. 8 - Prob. 8SEACh. 8 - Prob. 9SEACh. 8 - Calculate retained earnings balance. (LO 5)....Ch. 8 - Prob. 11SEACh. 8 - Prob. 12SEBCh. 8 - Prob. 13SEBCh. 8 - Prob. 14SEBCh. 8 - Prob. 15SEBCh. 8 - Prob. 16SEBCh. 8 - Prob. 17SEBCh. 8 - Prob. 18SEBCh. 8 - Prob. 19SEBCh. 8 - Prob. 20SEBCh. 8 - Prob. 21SEBCh. 8 - Prob. 22SEBCh. 8 - Prob. 23EACh. 8 - Prob. 24EACh. 8 - Prob. 25EACh. 8 - Prob. 26EACh. 8 - Prob. 27EACh. 8 - Prob. 28EACh. 8 - Prob. 29EACh. 8 - Prob. 30EACh. 8 - Prob. 31EACh. 8 - Analyze equity accounts. (LO 1, 2, 3, 5). The...Ch. 8 - Prob. 33EACh. 8 - Prob. 34EACh. 8 - Prob. 35EACh. 8 - Prob. 36EACh. 8 - Prob. 37EACh. 8 - Prob. 38EACh. 8 - Prob. 39EBCh. 8 - Prob. 40EBCh. 8 - Prob. 41EBCh. 8 - Prob. 42EBCh. 8 - Prob. 43EBCh. 8 - Prob. 44EBCh. 8 - Prob. 45EBCh. 8 - Prob. 46EBCh. 8 - Prob. 47EBCh. 8 - Prob. 48EBCh. 8 - Prob. 49EBCh. 8 - Prob. 50EBCh. 8 - Prob. 51EBCh. 8 - Prob. 52EBCh. 8 - Prob. 53EBCh. 8 - Prob. 54EBCh. 8 - Prob. 55PACh. 8 - Prob. 56PACh. 8 - Prob. 57PACh. 8 - Prob. 58PACh. 8 - Prob. 59PACh. 8 - Prob. 60PACh. 8 - Prob. 61PACh. 8 - Prob. 62PACh. 8 - Prob. 63PBCh. 8 - Prob. 64PBCh. 8 - Prob. 65PBCh. 8 - Prob. 66PBCh. 8 - Prob. 67PBCh. 8 - Prob. 68PBCh. 8 - Prob. 69PBCh. 8 - Prob. 70PBCh. 8 - Prob. 1FSACh. 8 - Prob. 2FSACh. 8 - Prob. 3FSACh. 8 - Prob. 1CTPCh. 8 - Prob. 2CTPCh. 8 - Prob. 1IECh. 8 - Prob. 2IECh. 8 - Prob. 3IECh. 8 - Prob. 4IECh. 8 - Prob. 5IE
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- Which of the following statements is CORRECT? A. Net working capital is defined as current assets minus the difference between current liabilities and notes payable, and any increase in the current ratio automatically indicates that net working capital has increased B. If a company follows a policy of "matching maturities," this means that it matches its use of common stock with its use of long-term debt as opposed to short-term debt. C. Net working capital is defined as current assets minus the difference between current liabilities and notes payable, and any decrease in the current ratio automatically indicates that net working capital has decreased. D. Credit policy has an impact on working capital because it influences both sales and the time before receivables are collected.arrow_forwardWhen treasury stock accounted for by the cost method is subsequently sold for more than its purchase price, the excess of the cash proceeds over the carrying value of the treasury stock should be recognized as: a.an increase in retained earnings b.income from continuing operations c.an ordinary gain d.an increase in additional paid-in capitalarrow_forwardCumulative preferred dividends in arrears should be shown in a corporation's balance sheet as: O A footnote O An increase in current liabilities O An increase in current liabilities for the current portion and long-term liabilities for the long-term portion O An increase in stockholders' equityarrow_forward
- Which of the following is true about dividends: Group of answer choices Increasing dividends can impact retained earnings. Dividends must always be paid if the company makes profit. Dividends are split equally between stockholders and bondholders. Dividends paid reduce the net income that is reported on a company's income statement.arrow_forwardRevaluation surplus of a company will be shown in a. Statement of cash flows b. iIt will be shown only in current liabilities c. It will not be shown anywhere d. Statement of changes in equity Which of the following effect is Correct for the payment of dividend by the company on Irredeemable preference shares? a. Increase Bank balance b. Increase Current liability c. Decrease Current liability d. Increase Retained earningsarrow_forwardAn investor has a long-term investment in stocks. Regular cash dividends received by the investor are recorded as Fair Value Method Equity Method A reduction of the investment Income Income Income Income A reduction of the investment A reduction of the investment A reduction of the investmentarrow_forward
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- The use of homemade dividends allows stockholders to change the: A. cash payout received by selling off shares to receive current income. B. return pattern of the firm by leveraging their position like the firm. C. value of the company by increasing shareholders' cash payout D. Both A and C. E. Both B and C.arrow_forwardWhat is the effect of purchasing treasury stock on a company’s earnings per share and return on equity, respectively? (Enter 1, 2, 3, or 4 that represents the correct answer.) No effect and no effect Decrease and decrease Increase and increase Increase and decreasearrow_forwardDo you add or subtract total retained earnings with paid in capital when accounting stock?arrow_forward
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