Ac302 Unit 2 Quiz - Accounting Iii

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1. Which of the following items could appropriately be shown in the contributed capital section of stockholders' equity on the balance sheet? unrealized capital | donated capital | ** common stock option warrants | none of the above | 2. Preferred stockholders share with common stockholders in any "extra" dividends when the preferred stock is: cumulative | callable | **participating | convertible | 3. On January 1, 2010, Roberto Company adopts a compensatory stock option plan and grants 40 executives 1,000 shares each at $30 a share. The fair value per option is $7 on the grant date. The company estimates that its annual employee turnover rate during the service period of three years will be 4%. However, at the end of 2011, the company estimates that the employee turnover will be 5% a year for the entire service period. The compensation expense for 2011 will be (Round off turnover calculations to three decimal places and answer to the nearest dollar.) ** $77,468 | $80,022 | $82,575 | $160,043 | 4. On January 1, 2010, Wilson Corporation granted Emelia Walker, its president, a compensatory stock option plan to purchase 8,000 shares of Wilson's $10 par common stock. The option price is $25 per share and the option has a fair value of $7 per option, which is exercisable on January 1, 2014, after four years of service. How much compensation expense should Wilson recognize on December 31, 2010? $0 | ** $14,000 | $56,000 | $80,000 | 5. Which of the following is not a reason for a corporation to acquire treasury stock? to reduce the likelihood of being acquired by another company | to maintain the market price of the company's stock | ** to reduce the earnings per share | to be used in the acquisition of other companies | 6. A preemptive right is the right to vote in the election of directors and to

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