60.1K

Verified Solution

Link Copied!

Which of the following accounts is considered to be a contra-shareholders' equity account? A) Common Stock B) Paid-in-Capital in Excess of Par Value C) Preferred Stock D) Treasury Stock 22. Joe Carry-out Coffee began the year with S112,000 in retained earnings, and 21,000 shares of $0.50 par value common stock originally issued at $10 per share. During the year, the board of directors declared $12,000 of cash dividends on June 30. On July 1, Joe Carry-out declared a reverse 1-for-2 stock split. The market price of the Joe Carry-out stock was $36.00 just before the split. Which of the following is one effect on the day the stock split occurs? A) Retained earnings increases by $10,500 B) Common stock increases by $10,500 C) Total shareholders' equity decreases by $21,000 D) The market price of the stock increases to $72.00 per share 23. Which of the following is a common signal that 'share repurchases' send to the capital market? A) That management feels that the current share price undervalues a firm's true value B) That management feels that a firm's current profits are overstated C) That management feels that it will not achieve its estimated earnings targets D) That dividends will not be paid during the foreseeable future 24. Which one of the following creates a change in So Soft Bread's cash account? A) A shareholder sells 300 shares of So Soft Bread stock back to So Soft Bread. B) Investors sell 200 shares of Soft Bread stock on the New York Stock Exchange. C) The market price of So Soft Bread's stock increases from $22 to $25 per share D) So Soft Bread distributes a 14% stock dividend to investors. 25. The difference between a tax credit and a tax deduction is: A) A tax deduction is more valuable B) A tax eredit reduces your tax liability by an amount equal to the expenditure whereas a tax deduction reduces your tax liability by a percentage of the expenditure. ax credit reduces your tax liability by a percentage of the expenditure C) A tax deduction reduces your tax liability by an amount equal to the expenditure whereas a D) Tax deductions are for individuals only, whereas tax credits are for corporations

Answer & Explanation Solved by verified expert

See Answer