Chapter 13/14 Accounting Test

Question 1

Calculating Retained Earnings

Answer 1

Retained Earnings, (date of last day of last accounting period)
Net Income for (current year)
Subtotal
Less: Cash Dividends - Preferred Stock
Cash Dividends - Common Stock
Stock Dividends - __% _______ Stock
Retained Earnings, (date of last day of current accounting period)

Question 2

Avg Issue Price of ____ Shares

Answer 2

$ Received / # of Shares Issued

Question 3

Calculate Common Dividends

Answer 3

At discretion of Board of Directors

Question 4

Calculate Stock Dividends

Answer 4

Stock Dividend % x # of Shares = # of Shares Issued

of Shares Issued x Fair Value = Recording Price

Question 5

Prior Period Adjustments

Answer 5

Result in a change in the net income/(loss) for past period which alters the balance of retained earnings

Retained Earnings, (date of last day of last accounting period) as originally reported
Prior Period Adjustment
Retained Earnings, (date of last day of last accounting period) as Restated
Net Income for (current year)
Subtotal
Less: Cash Dividends - Preferred Stock
Cash Dividends - Common Stock
Stock Dividends - __% _______ Stock
Retained Earnings, (date of last day of current accounting period)

Question 6

Calculate Earnings per Share

Answer 6

EPS = Net Income Attributable to Common Shareholders / Weighted Average Number of Common Shares Outstanding

Question 7

Stock Splits (Journal Entry)

Answer 7

Memo: _ for 1 stock split on ______ common/preferred shares

of common/preferred shares outstanding now = _____

Question 8

Multistep Income Statement

Answer 8

Sales
COfGS
Gross Profit
Operating Expenses
Profit from Operations
Other Expenses
Profit before Income Tax
Income Tax Expense
Profit from Continuing Operations
DISCONTINUED OPERATIONS
Loss from _(event)_, Net of $_(loss x tax%)_ income tax savings
(Record $Amount Lost - Tax Savings)
Profit

Question 9

Effect on Income Statement When You Remove Part of a Business

Answer 9

Add discontinued operations section, lowers ending profit.

Question 10

Journal Entry for Stock Dividends (Declaring and Issuing)

Answer 10

Declare:
DR - Stock Dividends - Common/Preferred
CR - Common/Preferred Stock Dividend Distributable

Issue:
DR - Common/Preferred Stock Dividend Distributable
CR - Common/Preferred Shares

Question 11

Journal Entry for Cash Dividends (Declaring and Issuing)

Answer 11

Declare:
DR - Cash Dividends - Common/Preferred
CR - Dividends Payable

Issue:
DR - Dividends Payable
CR - Cash

Question 12

Share Holder’s Equity Section

Answer 12

Dividend Rate
Cumulative
Share Type
(No) Par Value
Callable Price
# of Shares Authorized
# of Shares Issued

Contributed Capital in Excess of Par(Common/Preferred) Shares
Total Contributed Capital
Retained Earnings
Total Share Holder’s Equity