Question Details

ACCT 551
WEEK 5 
Grading Summary
These are the automatically computed results of your exam. Grades for essay questions, and comments from your instructor, are in the "Details" section below.	Date Taken:	2/1/2012
Time Spent:	34 min , 06 secs
Points Received:	12 / 20  (60%)

Question Type:	# Of Questions:	# Correct:
Multiple Choice	5	3


Grade Details
 1.	Question :	(TCO E) Stockholders' equity is generally classified into two major categories: 

 	Student Answer:		  contributed capital and appropriated capital.

 			  appropriated capital and retained earnings.

 			  retained earnings and unappropriated capital.

 		 	  earned capital and contributed capital.

 	Instructor Explanation:	Chapter 15. Page 744


 	Points Received:	4 of 4
 	Comments:	



 2.	Question :	(TCO E) A "secret reserve" will be created if

 	Student Answer:		  inadequate depreciation is charged to income.

 		 	  a capital expenditure is charged to expense.

 			  liabilities are understated.

 			  stockholders' equity is overstated.

 	Instructor Explanation:	Chapter 15. Page 748


 	Points Received:	4 of 4
 	Comments:	



 3.	Question :	(TCO E) Norton Company issues 4,000 shares of its $5 par value common stock having a market value of $25 per share, and 6,000 shares of its $15 par value preferred stock having a market value of $20 per share, all for a lump sum of $192,000. What amount of the proceeds should be allocated to the preferred stock?

 	Student Answer:		  $172,000

 			  $120,000

 		 	  $104,727

 		 	  $90,000

 	Instructor Explanation:	(4,000 X $25) + (6,000 X $20) = $220,000 
($120,000 ÷ $220,000) X $192,000 = $104,727.
Chapter 15.


 	Points Received:	4 of 4
 	Comments:	



 4.	Question :	(TCO F) Anders, Inc., has 5,000 shares of 5%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2011. There were no dividends declared in 2009. The board of directors declares and pays a $45,000 dividend in 2010 and in 2011. What is the amount of dividends received by the common stockholders in 2011?

 	Student Answer:	 	  $15,000

 			  $25,000

 			  $45,000

 			  $0

 	Instructor Explanation:	5,000 X $100 X .05 = $25,000 
($45,000 X 2) - ($25,000 X 3) = $15,000. 
Chapter 15.


 	Points Received:	4 of 4
 	Comments:	



 5.	Question :	(TCO F) Written, Inc. has outstanding 300,000 shares of $2 par common stock and 60,000 shares of no-par 8% preferred stock with a stated value of $5. The preferred stock is cumulative and nonparticipating. Dividends have been paid in every year except the past two years and the current year.

Assuming that $63,000 will be distributed as a dividend in the current year, how much will the preferred stockholders receive?

 	Student Answer:		  $21,000.

 		 	  $24,000.

 			  $48,000.

 		 	  $63,000.

 	Instructor Explanation:	60,000 X $5 X .08 X 3 = $72,000 > $63,000. 
Chapter 15.