Younger Company has outstanding both common stock and nonparticipating, non-cumulative preferred stock

Younger Company has outstanding both common stock and nonparticipating, non-cumulative preferred stock. The liquidation value of the preferred is equal to its par value. The book value per share of the common stock is unaffected by

a. the declaration of a stock dividend on preferred payable in preferred stock when the market price of the preferred is equal to its par value.
b. the declaration of a stock dividend on common stock payable in common stock when the market price of the common is equal to its par value.
c. the payment of a previously declared cash dividend on the common stock.
d. a 2-for-1 split of the common stock.


Answer: the payment of a previously declared cash dividend on the common stock

How should cumulative preferred dividends in arrears be shown in a corporation's statement of financial position?

a. Note disclosure
b. Increase in stockholders' equity
c. Increase in current liabilities
d. Increase in current liabilities for the amount expected to be declared within the year or operating cycle, and increase in long-term liabilities for the balance


Answer: Note disclosure

Assume common stock is the only class of stock outstanding in the Manley Corporation. Total stockholders' equity divided by the number of common stock shares outstanding is called

a. book value per share.
b. par value per share.
c. stated value per share.
d. market value per share.


Answer: book value per share