ACCT 370 Connect Smartbook Assignment 16 solutions complete answers and more!

ACCT 370 Connect Smartbook Assignment 16 solutions complete answers and more!

 

The accounting procedure/reporting convention known as the legality of corporate distributions to owners addresses

 

Which of the following statements is correct regarding GAAP's ownership perspective?

 

The limited liability aspect of common stock limits

 

Stock repurchases do not involve accounting gains and losses because they

 

On January 2, Patent Co. issued 10,000 shares of $1 par value common stock for $10 per share. On June 1, Patent reacquired 2,000 shares for $12 per share. On November 1, Patent resold 500 of the shares for $15 per share. If Patent uses the cost method, which of the following statements is true?

 

How a company's options, warrants, and convertible securities affect its earnings per share is the accounting procedure/reporting convention known as

 

When using the par value method of accounting for treasury stock,

 

Which of the following are true regarding GAAP's ownership perspective?

 

Which of the following statements are true?

 

When purchasers of common stock can only lose the amount invested to purchase the shares

 

Which of the following are true regarding surplus cash?

 

A contra-equity account is used to account for purchases of

 

Which of the following are true when a company borrows to finance a stock repurchase program?

 

The method that accounts for treasury stock by reducing contributed capital accounts for the amount of the stock's original issuance proceeds is known as the

 

Companies reacquire their own shares for all of the following reasons except

 

Financial statement analysts must understand how owners' equity is reported

 

Which of the following is an advantage for a shareholder who takes the stock repurchase?

 

Which of the following is incorrect regarding preferred stock?

 

Which of the following are concerns regarding companies who complete stock buyback programs?

 

All of the following are reasons corporations prefer to issue preferred stock except

 

            preferred stock requires the issuing company to retire it at some future date.

 

Dividends paid on mandatorily redeemable preferred stock are recorded as

 

When a lending agreement restricts allowable debt-to-equity levels it is referred to as a

 

Which of the following statements are true regarding preferred stock?

 

Which of the following statements is correct regarding preferred stock?

 

Which of the following are true regarding a trust preferred security?

 

Which of the following are reasons corporations may issue preferred stock?

 

Which of the following are true of the legality of corporate dividend distributions?

 

Which of the following is required to be retired at some future date?

 

If a dividend involves noncash assets, it is called a(n)       dividend.

 

Mandatorily redeemable preferred stock is reported as a(n)       on the balance sheet.

 

The Revised Model Business Corporation Act

 

Which of the following is not a preferred stock disclosure requirement?

 

Small stock dividends are

 

When a company creates a special purpose entity that then sells redeemable preferred stock to outside investors, the shares are called             securities.

 

Raoul, Inc. has 1,000,000 shares authorized and 800,000 shares have been issued. During 2020, the company purchased 26,000 shares of treasury stock that are accounted for using the cost method. The number of shares outstanding is

 

Which of the following are limits that states may place on corporate dividend distributions?

 

When computing book value per share

 

If a company declares a property dividend to be paid from an investment with a carrying value of $100,000 and a fair value of $142,000,

 

A typical employee stock option gives the employee the right to purchase a specified number of common shares within a specified time period at a specified price. This price is

 

Under the Revised Model Business Corporation Act,

 

Which of the following is not a reason companies use stock options to augment cash compensation?

 

A             reduces the per share par value and increases the number of share proportionately.

 

Which of the following parties lobbied the FASB in an attempt to influence reporting rules related to employee stock options?

 

The number of shares outstanding is generally

 

Under APB Opinion No. 25,

 

Book value per share is computed by dividing             by the number of       shares.

 

Which of the following is not a key provision of the current authoritative guidance for accounting for stock options?

 

A typical employee stock option gives the employee the right to purchase a specified number of common shares within a specified time period at a specified price called the       price.

 

The       date is the date when both the stock options are awarded to individual employees and the grant's terms are set.

 

Which of the following are reasons that companies use stock options to augment cash compensation?

 

GAAP specifies that compensation cost

 

Which of the following parties did not lobby the FASB in an attempt to influence reporting rules related to employee stock options?

 

The dollar value at which the debt can be converted into common stock is known as the

 

Which of the following are true of APB Opinion No. 25?

 

U.S. GAAP specifies that convertible bonds

 

Which of the following are key provisions of the current authoritative guidance for accounting for stock options?

 

GAAP permits companies to record debt conversion using the

 

The grant date is the date when

 

Under U.S. GAAP, which of the following is true for convertible debt that may be settled in cash?

 

Which of the following are true of compensation cost according to GAAP?

 

                  is the term used to describe how much of the company's total earnings accrue to each share of common stock.

 

Which of the following are true of convertible debt?

 

Flower, Inc. had 100,000 shares of common stock outstanding on January 1, 2020. On April 1, 2020, the company issued 10,000 new shares and on September 1, 2020, the company purchased 12,000 shares of treasury stock. The number of shares Flower should use in the denominator of its EPS calculation is

 

Which of the following is a reason for not assigning a value to the conversion privilege of convertible bonds?

 

Flower, Inc. has common stock, preferred stock, redeemable preferred stock, employee stock options, call options, and convertible bonds in its capital structure. Flower has a ______ capital structure and is required to present an additional measure called ______.

 

The book value approach for accounting for conversions of convertible bonds

 

Diluted EPS is a conservative measure because the diluted EPS measure presumes the _______ possible new share creation and therefore the ________ earnings flow to each share.

 

When a borrower has the right to pay some or all of the value of convertible debt in cash rather than in shares of stock, GAAP requires

 

Which of the following is not an assumptions necessary when computing diluted EPS?

 

Which of the following are true of earnings per share?

 

On January 1, 2020, Shrub, Inc. has $100,000 convertible debenture bonds which were sold at par ($1,000 per bond). The bonds are due in 10 years and pay 8% interest. Each bond is convertible into 20 shares of common stock. Shrub has a 35% tax rate. None of the bonds were converted during 2020. When Shrub computes diluted EPS on December 31, 2020, which of the following occurs?

 

A(n)             structure exists when a company has no convertible securities and no stock options or warrants outstanding.

 

Under GAAP guidance, when using the _________ method, the company assumes that any proceeds received from the exercise of options is used to buy back shares at the ______.

 

When a firm has a complex capital structure, financial instruments entitle holders to obtain common stock under specified conditions. This possible increase in the number of shares is called            .

 

      securities are ignored when computing EPS because they increase EPS.

 

Which of the following are true of diluted EPS?

 

Which of the following are assumptions necessary when computing diluted EPS?

 

On January 1, 2020, Shrub, Inc. has $100,000 convertible debenture bonds which were sold at par ($1,000 per bond). The bonds are due in 10 years and pay 6% interest. Each bond is convertible into 10 shares of common stock. Shrub has a 30% tax rate. None of the bonds were converted during 2020. When Shrub computes diluted EPS on December 31, 2020, which of the following occurs?

 

For which method does the company assume that any proceeds received from the exercise of options are used to buy back shares at the average market price for the period?

 

An option will be antidilutive when

 

On January 2, Patent Co. issued 10,000 shares of $1 par value common stock for $10 per share. On June 1, Patent reacquired 2,000 shares for $12 per share. On November 1, Patent resold 500 of the shares for $15 per share. On December 20, Patent resold 500 shares for $11 per share. If Patent uses the cost method, on December 20,

 

When a company has a simple capital structure it computes EPS as