23) The computation of equivalent units is generally not necessary when: a.Begin
ID: 2454077 • Letter: 2
Question
23) The computation of equivalent units is generally not necessary when:
a.Beginning work-in-process inventories are significantly larger than ending work-in-process inventories.
b.Beginning and ending work in process inventories differ only slightly.
c.The number of units in ending work-in-process exceeds the number of units completed and transferred to finished goods during the period.
d.Per-unit costs become distorted as a result of not computing equivalent units of production.
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3) Seville Corporation has net assets of $2,072,000 and paid-in capital of $700,000. The only stock issue consists of 74,000 outstanding shares of common stock. From this information, it can be deduced that the company has:
a. Retained earnings of $2,072,000.
b. A deficit of $2,072,000.
c. A book value of $9.46 per share of common stock.
d. A book value of $28 per share of common stock.
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4) The statement of stockholders equity:
a. Is a required financial statement.
b. May be issued as a substitute for the statement of retained earnings.
c. Shows the changes during the year in all stockholders' equity accounts except retained earnings.
d. Is a statement sent to each stockholder showing that person's return on equity.
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5) Which of the following apply to closely held corporations?
a. There is no organized market for buying and selling the company's shares.
b. The company must prepare and issue its financial statements in conformity with generally accepted accounting principles.
c. The company must have its financial statements audited by an independent firm of CPAs.
d. The company's financial information must be submitted to the Securities and Exchange Commission.
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6) A cash dividend paid to shareholders is reported on the:
a. Financing activities section of the statement of cash flows.
b. Balance sheet.
c. Income statement.
d. Operating activities section of the statement of cash flows.
Explanation / Answer
Answere:
23.The computation of equivalent units is generally not necessary when:
d.Per-unit costs become distorted as a result of not computing equivalent units of production.
Because when equivalent number of finished good are not computed then it is difficullt to compute number of unit pending in work- in - progess, hence as result of which computation of equivalent units is generally not necessary.
3) Seville Corporation
d). A book value of $28 per share of common stock
because
net asset of company 2072000 $
number of common stock 74000
book value per share = net asset / no. of common stock
2072000/74000 = 28
hence answere is (d). A book value of $28 per share of common stock.
4) The statement of stockholders equity:
c. Shows the changes during the year in all stockholders' equity accounts except retained earnings.
Reason: this statement show all major changes in equity holding occurs during the financial year. And the stock holder equity position holding on the balance sheet date.
5) Which of the following apply to closely held corporations?
a. There is no organized market for buying and selling the company's shares.
Reason : closely held corporation means the company who has limited number of shareholder. closely held corparation share not publicliy traded on regular basis. there is no such specific market for buying and selling of share.
6) A cash dividend paid to shareholders is reported on the:
a. Financing activities section of the statement of cash flows.
Reason:The financing activity in the cash flow statement focuses on how a firm raises capital and pays it back to investors through the capital markets. These activities also include paying cash dividends, adding or changing loans, or issuing and selling more stock. This section of the statement of cash flows measures the flow of cash between a firm and its owners and creditors. Dividends are not expenses because they are cash distributions to shareholders from after-tax net income.
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