94 the following information is available for the barber corporation as of december 4305953

94 the following information is available for the barber corporation as of december 4305953

94) The following information is available for the Barber Corporation as of December 31, 2010:

Preferred shares, cumulative, $10, 1,000 shares authorized and issued$100,000

Common shares, 4,000 shares authorized and issued400,000

Retained earnings100,000

Barber Corporation did not declare a dividend in 2009 or 2010. The liquidation value of the preferred shares is $100 per share. Prior to 2009, there were no dividends in arrears. Compute book value per share for preferred shares and common shares.

A) $110 for preferred, $185 for common

B) $120 for preferred, $182.50 for common

C) $100 for preferred, $187.50 for common

D) $120 for preferred, $120  for common

95) The following information is available for the Frasier Corporation as of December 31, 2010:

Preferred shares, $10, cumulative, 1,000 shares authorized and issued$100,000

Common shares, 6,000 shares authorized and issued500,000

Retained earnings 750,000

Frasier Corporation declared a dividend in 2010 amounting to $5,000. No dividends were declared in 2009. The liquidation value of the preferred stock is $100 per share. Prior to 2009, there were no dividends in arrears. Compute book value for preferred shares and common shares in total.

A) $125,000 for preferred, $1,225,000 for common

B) $105,000 for preferred, $1,245,000 for common

C) $120,000 for preferred, $1,230,000 for common

D) $115,000 for preferred, $1,235,000 for common

96) For a company that has only common shares outstanding, dividing total shareholders' equity by the number of shares outstanding determines the:

A) book value per share

B) liquidation value per share

C) redemption value per share

D) market value per share

97) The book value of preferred shares is equal to:

A) liquidation value minus any dividends in arrears

B) liquidation value plus any dividends in arrears

C) market value minus any dividends in arrears

D) market value plus any dividends in arrears

Table 13-4

 

The shareholders' equity section of the balance sheet of Cresco Corporation follows:                              

Contributed capital: 

Preferred shares, cumulative, $3.50, 4,000 shares outstanding,

          liquidation value $56 per share $210,000

Common shares, 20,000 shares outstanding397,500

Retained earnings138,250

Note: There are two years dividends in arrears on the preferred shares, including the current year.

98) Refer to Table 13-4. The book value per share for preferred shares is:

A) $57.00

B) $56.00

C) $63.00

D) $59.50

99) Refer to Table 13-4. The book value per share for common shares is:

A) $25.89

B) $24.69

C) $26.09

D) $25.39

100) Pratt Corporation's balance sheet for 2010 reveals total shareholders' equity of $2,500,000. There are 10,000 shares of cumulative, $10 preferred shares outstanding and 50,000 common shares outstanding. To date, dividends in arrears for the preferred shares amount to $25,000. The liquidation value of the preferred shares is $105 per share. Book value per share of common shares is:

A) $28.75

B) $29.50

C) $28.50

D) $29.00

101) Cooper Corporation's balance sheet for 2010 reveals total shareholders' equity of $2,500,000. There are 10,000 shares of noncumulative, $10 preferred shares outstanding and 50,000 common shares outstanding. The liquidation value of the preferred shares is $105 per share. Book value per share of common shares is:

A) $29.00

B) $29.50

C) $28.50

D) $28.75

102) The ________ measures a company's success in using its assets to earn income for the stakeholders who are financing the business.

A) return on assets

B) return on equity

C) current ratio

D) debt-to-equity ratio

103) The formula for computing return on assets is:

A) (net income plus interest expense)/average total assets

B) (net income plus preferred dividends)/average total assets

C) (net income less total assets)/average shareholders' equity

D) (net income plus total assets)/average shareholders' equity

104) The formula for computing return on equity is:

A) (net income less interest expense)/average shareholders' equity

B) (net income less preferred dividends)/average common shareholders' equity

C) (net income plus preferred dividends)/shareholders' equity at the end of the period

D) (net income plus interest expense)/average common shareholders' equity

 

Table 13-5

The following information is available for Jansen Corporation for the current year:

Net income$156,000

Preferred dividends24,000

Interest expense17,500

Beginning of year: 

Total assets 850,000

Total liabilities375,000

Total common shareholders' equity395,000

End of year:

Total assets 930,000

Total liabilities405,000

Total common shareholders' equity435,000

105) Refer to Table 13-5. The return on assets for Jansen Corporation was:

A) 19.5%

B) 18.7%

C) 17.5%

D) 16.8%

106) Refer to Table 13-5. The return on equity for Jansen Corporation was:

A) 30.3%

B) 31.8%

C) 35.9%

D) 37.6%

Table 13-6

 

The following selected list of accounts with their normal balances was taken from the general ledger of Gore Ltd. as of December 31, 2010:

Cash$199,000

Common shares, 10,000 shares authorized, 5,000 shares issued265,000

Retained earnings131,500

Cash dividends payable20,000

Preferred shares, 500,000 shares authorized 100,000  shares issued800,000

107) Refer to Table 13-6. The average issue price of a common share was:

A) $20.00

B) $2.00

C) $53.00

D) $30.00

108) Refer to Table 13-6. The average issue price of a preferred share was:

A) $1.60

B) $20.00

C) $40.00

D) $8.00

109) Refer to Table 13-6. Which account should be listed first in the shareholders' equity section?

A) Retained earnings

B) Common shares

C) Contributed surplus

D) Preferred shares

 

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