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GAAP by the FASB on January 9, 2015, as a result of the adoption of Accounting Standards Update (ASU) No. The concept of extraordinary items was dropped from U.S. Calculate the balance in Contributed Capital, Treasury Stock, on September 1 (assume its beginning-year balance is zero).FASB Drops Extraordinary Items – When Will It Be Tested On The CPA Exam? By Nick Spoltore January 16, 2015.Prepare the journal entries required to record these transactions.The current market value is $15 per common share.Ī company's treasury stock transactions for the current year are as follows: (1) 1,000 shares of its common stock were purchased on June 1 for $40,000 (2) On July 1 it reissued 500 of these shares at $45 per share (3) On August 1 it reissued the 500 remaining treasury shares at $38 per share. The following selected transactions related to the company's stock took place during the current year:ġ5 Declared a 40% stock dividend to stockholders of record on May 1, to be issued May 10. Preferred Stock, $100 par value, 6%, 5,000 shares issuedĬommon Stock, $10 par value, 50,000 shares issuedĪllocate the cash dividend between the preferred and common stockholders assuming the preferred stock is cumulative and nonparticipating and dividends are one year in arrears.Ī corporation has 200,000 shares of $10 par value common stock outstanding. Prepare journal entries to record the following selected transactions that occurred during the company's first year of operations:ġ0 Sold 96,000 shares of common stock for $8 cash per share.ġ5 Exchanged 10,000 shares of common stock for equipment with a market value of $80,000.ġ Exchanged 500 shares of common stock for $2,500 of legal services incurred during the company's organization.Ī corporation had the following stock outstanding when the company's board of directors declared a $112,000 cash dividend during the current year: Market value per share by dividends.Īre the answers for you folks with non java-enabled browsers.Ī company is authorized to issue 50,000 shares of $50 par value, 8% cumulative, participating preferred stock, and 750,000 shares of $5 par value common stock. Market value per share by earnings per share.ĭ. The price-earnings ratio is calculated by dividing:Ī. This implies its book value per common share is: It also has 25,000 shares of common stock outstanding, and its total stockholders' equity equals $500,000. 9.Ī company has 1,000 shares of $100 par value preferred stock. Can be subject to appropriation by a corporation's directors to limit dividends. Can be subject to restrictions due to loan agreements.ĭ. Can be subject to a statutory restriction by a state.Ĭ. Normally approximates a company's cumulative net income less dividends declared.ī. Accounted for in current and future periods. Accounted for with a cumulative "catch-up" adjustment.ĭ. Are disclosed before discontinued operations on the income statement. Are included in income from operations.ĭ. Are not reported on a corporate income statement.ī. The nature and justification for the change.ĭ. The effect of the change on earnings per share.Ĭ. The cumulative effect of the change on net income of prior periods.ī. 5.Ī corporation that makes a change in its accounting principles must report in its financial statements:Ī.
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Preferred stock on which the right to receive dividends is forfeited for any year that the dividends are not declared is referred to as:ĭ.
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The total amount of cash and other assets received by a corporation from its stockholders in exchange for common stock is:ĭ. The total amount of stock that a corporation's charter allows it to issue is referred to as:ĭ. The costs of bringing a corporation into existence, including legal fees, promoter fees, and amounts paid to the state are called: However, answers are provided for those of you with non javascript enabled browsers. Note: Your browser must support JavaScript in order to use this quiz. Select your answer by clicking on the button next to the appropriate alternative. ACCT-201 Principles of Financial Accounting - Practice Exam - Chapter 11ĪCCT 201 Principles of Financial Accounting