Which of the following is/are true?
I. A simple capital structure is one that does not include any common stock equivalents or dilutive contingent securities.
II. A firm with common stock, preferred equity and debt can be considered to have a simple capital structure.
III.
Any security that is dilutive must be included in the calculation of Diluted EPS.
A.
I and II
B.
II and III
C.
I, II and III
D.
I only
The current economic environment is one of steady inflation. A firm uses historical cost accounting. Which of the following is/are true?
I. The firm's book value is overstated.
II. The firm's depreciation expense is understated.
III. The firm's tax expense is overstated.
IV.
The firm's net income is understated.
A.
II and IIIs tax expense is overstated.
IV. The firm's net income is understated.
B.
I and IV
C.
I and III
D.
I, II and IV
In a period of rising prices, the inventory method that gives the lowest possible value for ending inventory is:
A. gross profit
B. LIFO
C. FIFO
D. weighted average
The cash spent on replacing operating capacity used up in the normal course of business is classified as:
A. investing cash flow.
B. operating cash flow.
C. either operating cash flow and investing cash flow.
D. financing cash flow.
Typical features attached to preferred stock include all of the following except:
A. Demand redemption rights.
B. Dividend distribution preferences.
C. Liquidation priorities.
D. Non-voting rights.
Which of the following types of receivables is generally the most liquid?
A. Trade receivables
B. Receivables due from affiliated companies
C. None of these answers
D. Notes receivable
E. Receivables due from corporate officers
Morgan Inc. was organized on January 2, 1997 with the following capital structure: 10% cumulative preferred stock, par value $100 and liquidation value $105; authorized, issued and outstanding 1,000shares, $100,000 Common stock, par value $25; authorized 100,000 shares; Issued and outstanding 10,000 shares, $250,000 Morgan had net income of $450,000 for its first year, but no dividends were declared. How much was Morgan's book value per preferred share at December 31, 1997?
A. $100
B. $145
C. $110
D. $115
E. $105
Which of the following is not a current liability?
A. Notes Payable
B. Wages Payable
C. Allowance for Uncollectible Accounts
D. Unearned Revenue
Stock dividends have the greatest impact on which section of the balance sheet?
A. the components of stockholders' equity
B. total stockholders' equity
C. total assets
D. total assets and total stockholders' equity
E. retained earnings
A common-size balance sheet consists of which of the following?
A. Expressing all items on the balance sheet as a percentage of total capital.
B. Expressing all items on the balance sheet as a percentage of total sales.
C. Expressing all items on the balance sheet as a percentage of total assets.
D. None of these answers.
E. Expressing all items on the balance sheet as a percentage of total liabilities.
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