Josh's,Inc

question 71

Multiple Choice

Josh's,Inc.has 7,000 shares of stock outstanding with a par value of $1.00 per share and a market value of $32 a share.The balance sheet shows $82,000 in the capital in excess of par account,$7,000 in the common stock account,and $64,800 in the retained earnings account.The firm just announced a 10 percent stock dividend.What is the value of the capital in excess of par account after the dividend?

• A)$76,000
• B)$82,000
• C)$97,700
• D)$103,700
• E)$104,400

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Definitions:

Debt Ratio

A financial ratio that measures the proportion of a company's total debt to its total assets, indicating its leverage level.

Times Interest Earned Ratio

A measure of a company's ability to meet its debt obligations, calculated by dividing earnings before interest and taxes by interest expense.

Loaning Money

The act of giving money to another party with the agreement that the money will be repaid, often with interest.

Debt-Equity Ratio

A measure of a company's financial leverage, calculated by dividing its total liabilities by its shareholders' equity.