Find common stock outstanding

Assignment Help Financial Accounting

Reference no: EM1313862

Short questions on valuation of stocks and bonds.

1. Hoffman Corporation retires its bonds at 106 on January 1, following the payment of semi-annual interest. The face value of the bonds is $400,000. The carrying value of the bonds at the redemption date is $419,800. The entry to record the redemption will include a

a. credit of $19,800 to Loss on Bond Redemption.

b. debit of $24,000 to Premium on Bonds Payable.

c. credit of $4,200 to Gain on Bond Redemption.

d. debit of $19,800 to Premium on Bonds Payable.

2. At December 31, the stockholders' equity section shows: Common stock, $5 par value, 1,320,000 shares issued

And 1,200,000 shares outstanding...............	$6,600,000
Additional paid-in-capital.........................................	1,400,000
Retained earnings......................................................	500,000
Treasure stock (120,000 shares)............................	-700,000
Total stockholders' equity.........................................	$7,800,000

The book value per share of common stock is

a. $5.91.

b. $6.50.

c. $7.08.

d. $6.44.

3. The market price of a bond is the

a. present value of its principal amount at maturity plus the present value of all future interest payments.

b. principal amount plus the present value of all future interest payments.

c. principal amount plus all future interest payments.

d. present value of its principal amount only.

4. Roberson Corporation was organized on January 1, 2008, with authorized capital of 750,000 shares of $10 par value common stock. During 2008, Roberson issued 30,000 shares at $12 per share, purchased 3,000 shares of treasury stock at $13 per share, and sold 3,000 shares of treasury stock at $14 per share. What is the amount of additional paid-in capital at December 31, 2008?

a. $0

b. $3,000

c. $60,000

d. $63,000

5. The purchase of treasury stock

a. decreases common stock authorized.

b. decreases common stock issued.

c. decreases common stock outstanding.

d. has no effect on common stock outstanding.

6. When a corporation has both preferred and common stock outstanding, earnings per share is computed by dividing net income

a. by ending common shares outstanding.

b. by weighted average common shares outstanding.

c. less preferred dividends by ending common shares outstanding.

d. less preferred dividends by the weighted average of common shares outstanding.

7. In determining earnings per share, dividends for the current year on noncumulative preferred stock should be

a. disregarded.

b. added back to net income whether declared or not.

c. deducted from net income only if declared.

d. deducted from net income whether declared or not.

8. In the stockholders' equity section of the balance sheet, the classification of capital stock consists of

a. additional paid-in capital and common stock.

b. common stock and treasury stock.

c. common stock, preferred stock, and treasury stock.

d. common stock and preferred stock.

9. Legal capital per share cannot be equal to the

a. par value per share of par value stock.

b. total proceeds from the sale of par value stock above par value.

c. stated value per share of no-par value stock.

d. total proceeds from the sale of no-par value stock.

10. Each payment on a mortgage note payable consists of

a. interest on the original balance of the loan.

b. reduction of loan principal only.

c. interest on the original balance of the loan and reduction of loan principal.

d. interest on the unpaid balance of the loan and reduction of loan principal.

Reference no: EM1313862

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