Question 1

Common Stock Subscribed is:

Accepted Answer

A) shown as an equity account below Issued Common Stock. 
B) a contra-asset account. 
C) a receivables account. 
D) shown on the income statement as a revenue. 
A) shown as an equity account below Issued Common Stock. 
B) a contra-asset account. 
C) a receivables account. 
D) shown on the income statement as a revenue. A

Question 2

Preferred stock that is given a right to share with the common stock in dividends in excess of a stated preferred dividend rate is called:

Accepted Answer

A) nonparticipating. 
B) participating. 
C) cumulative. 
D) noncumulative. 
A) nonparticipating. 
B) participating. 
C) cumulative. 
D) noncumulative. B

Question 3

Washington Corporation issued 5,000 shares of its $20 par value common stock for $23 per share.The entry to record the issuance would include a:

Accepted Answer

A) credit to Cash for $115,000. 
B) credit to Common Stock for $15,000. 
C) credit to Common Stock for $100,000. 
D) debit to Paid-in Capital in Excess of Par Value-Common for $15,000. 
A) credit to Cash for $115,000. 
B) credit to Common Stock for $15,000. 
C) credit to Common Stock for $100,000. 
D) debit to Paid-in Capital in Excess of Par Value-Common for $15,000. C

Question 4

Five hundred shares of $26 par common stock was exchanged for a piece of equipment with a fair market value of $13,500.The journal entry to record the transaction would include a:

Accepted Answer

A) credit to Equipment for $13,000. 
B) debit to Common Stock for $13,500. 
C) credit to Paid-In Capital in Excess of Par Value-Common for $500. 
D) credit to Common Stock for $13,500. 
A) credit to Equipment for $13,000. 
B) debit to Common Stock for $13,500. 
C) credit to Paid-In Capital in Excess of Par Value-Common for $500. 
D) credit to Common Stock for $13,500.

Question 5

RH Corporation Stockholders' Equity section includes the following information:
$$\begin{array} { | l | r | } 
\hline\text { Preferred Stock } & \$ 11,000 \
\hline \text { Paid-in Capital in Excess of Par Value-Preferred } & 20,000 \
\hline \text { Common Stock } & 20,000 \
\hline \text { Paid-in Capital in Excess of Par Value-Common } & 4,000 \
\hline \text { Retained Earnings } & 7,000 \
\hline
\end{array}$$
Total paid-in capital is:

Accepted Answer

A) $48,000. 
B) $55,000. 
C) $27,000. 
D) $21,000. 
A) $48,000. 
B) $55,000. 
C) $27,000. 
D) $21,000.

Question 6

A common shareholder's right to purchase an equivalent percentage of new stock is his participating right.

Accepted Answer

A) True 
 B)False

Question 7

An amount determined by the corporation board of directors and assigned to no-par value stock is:

Accepted Answer

A) par value. 
B) stated value. 
C) book value. 
D) market value. 
A) par value. 
B) stated value. 
C) book value. 
D) market value.

Question 8

Jane Kathryn has 30,000 shares outstanding of $10 par value,10% preferred stock and 100,000 shares outstanding $5 par value common stock.In the first 3 years of operations,the company paid dividends in Year 1,$0;Year 2,$40,000;Year 3,$100,000.Calculate the dividend paid to preferred and common stockholders under the following independent situations:

Accepted Answer

The answer of Jane Kathryn has 30,000 shares outstanding of...

Question 9

A document submitted by incorporators when applying for a charter is known as:

Accepted Answer

A) articles of incorporation. 
B) charter. 
C) proxy. 
D) stock certificate. 
A) articles of incorporation. 
B) charter. 
C) proxy. 
D) stock certificate.

Question 10

Officers of the corporation are:

Accepted Answer

A) appointed by the stockholders. 
B) stockholders of the corporation. 
C) appointed by the board of directors. 
D) None of these answers is correct. 
A) appointed by the stockholders. 
B) stockholders of the corporation. 
C) appointed by the board of directors. 
D) None of these answers is correct.

Question 11

A major disadvantage of a corporation is the:

Accepted Answer

A) difficulty in transferring ownership. 
B) limited life. 
C) difficulty in raising capital. 
D) double taxation of income to the corporation and of dividends paid to shareholders. 
A) difficulty in transferring ownership. 
B) limited life. 
C) difficulty in raising capital. 
D) double taxation of income to the corporation and of dividends paid to shareholders.

Question 12

Alpha-Omega Industries has 20,000 shares of $10 par common stock and 10,000 shares of $40 par,5% preferred stock outstanding.Total dividends available are $62,000.Compute the dividends to be distributed to preferred and common stockholders under the following condition.
The preferred stock is nonparticipating and cumulative with no dividends distributed last year.

Accepted Answer

Preferred Stock: $40

Question 13

Number of preferred shares times market value per share times dividend rate is the formula used to determine the dividends to be paid.

Accepted Answer

A) True 
 B)False

Question 14

When a company distributes some of their profits to shareholders,it is in the form of:

Accepted Answer

A) cumulative stock. 
B) reduced taxes. 
C) dividends. 
D) bonds. 
A) cumulative stock. 
B) reduced taxes. 
C) dividends. 
D) bonds.

Question 15

Par value represents:

Accepted Answer

A) the market value of the stock. 
B) an arbitrary value that is placed on each share of stock. 
C) the legal capital of the corporation. 
D) Both B and C are correct. 
A) the market value of the stock. 
B) an arbitrary value that is placed on each share of stock. 
C) the legal capital of the corporation. 
D) Both B and C are correct.

Question 16

Nature's Honey Corporation received the final installment of $1,000 on a stock subscription for 20 shares of $100 par value common stock.After recording the cash receipt,the entry to issue the stock would include a:

Accepted Answer

A) debit to Paid-in Capital in Excess of Par Value-Common for $2,000. 
B) credit to Paid-in Capital in Excess of Par Value-Common for $2,000. 
C) debit to Common Stock for $2,000. 
D) debit to Common Stock Subscribed for $2,000. 
A) debit to Paid-in Capital in Excess of Par Value-Common for $2,000. 
B) credit to Paid-in Capital in Excess of Par Value-Common for $2,000. 
C) debit to Common Stock for $2,000. 
D) debit to Common Stock Subscribed for $2,000.

Question 17

Prepare the journal entries for Mayhem Manufacturing:
July 21 Issued 7,000 shares of $10 par common stock for $85,000.
July 29 Issued 2,500 shares of 7%,$35 par preferred stock for equipment with a fair market value of $95,000.

Accepted Answer

The answer of Prepare the journal entries for Mayhem Manufacturing:
July...

Question 18

One type of preferred stock that entitles its holders not only to a fixed dividend but also to an opportunity to share in additional dividends with common stockholders is known as:

Accepted Answer

A) participating. 
B) cumulative. 
C) non-cumulative. 
D) common. 
A) participating. 
B) cumulative. 
C) non-cumulative. 
D) common.

Question 19

The entry to record selling 100 shares of no-par common stock with a stated value of $30 for $40 would be to:

Accepted Answer

A) debit Common Stock for $4,000;credit Cash for $4,000. 
B) debit Cash for $4,000;credit Common Stock for $4,000. 
C) debit Cash for $4,000;credit Common Stock for $3,000;credit Paid-In Capital in Excess of Stated Value-Common for $1,000. 
D) debit Cash for $4,000;credit Common Stock for $1,000;credit Paid-In Capital in Excess of Par Value-Common for $3,000. 
A) debit Common Stock for $4,000;credit Cash for $4,000. 
B) debit Cash for $4,000;credit Common Stock for $4,000. 
C) debit Cash for $4,000;credit Common Stock for $3,000;credit Paid-In Capital in Excess of Stated Value-Common for $1,000. 
D) debit Cash for $4,000;credit Common Stock for $1,000;credit Paid-In Capital in Excess of Par Value-Common for $3,000.

Question 20

List and discuss the following:
a.Rights of common stockholders
b.Rights of preferred stockholders

Accepted Answer

a.The rights of common stockholders incl

Exam 18: Corporations: Organizations and Stock

Common Stock Subscribed is:

Preferred stock that is given a right to share with the common stock in dividends in excess of a stated preferred dividend rate is called:

Washington Corporation issued 5,000 shares of its $20 par value common stock for $23 per share.The entry to record the issuance would include a:

Five hundred shares of $26 par common stock was exchanged for a piece of equipment with a fair market value of $13,500.The journal entry to record the transaction would include a:

RH Corporation Stockholders' Equity section includes the following information: Preferred Stock \ 11,000 Paid-in Capital in Excess of Par Value-Preferred 20,000 Common Stock 20,000 Paid-in Capital in Excess of Par Value-Common 4,000 Retained Earnings 7,000 Total paid-in capital is:

A common shareholder's right to purchase an equivalent percentage of new stock is his participating right.

An amount determined by the corporation board of directors and assigned to no-par value stock is:

A document submitted by incorporators when applying for a charter is known as:

Officers of the corporation are:

A major disadvantage of a corporation is the:

Number of preferred shares times market value per share times dividend rate is the formula used to determine the dividends to be paid.

When a company distributes some of their profits to shareholders,it is in the form of:

Par value represents:

Nature's Honey Corporation received the final installment of $1,000 on a stock subscription for 20 shares of $100 par value common stock.After recording the cash receipt,the entry to issue the stock would include a:

Prepare the journal entries for Mayhem Manufacturing: July 21 Issued 7,000 shares of $10 par common stock for $85,000. July 29 Issued 2,500 shares of 7%,$35 par preferred stock for equipment with a fair market value of $95,000.

One type of preferred stock that entitles its holders not only to a fixed dividend but also to an opportunity to share in additional dividends with common stockholders is known as:

The entry to record selling 100 shares of no-par common stock with a stated value of $30 for $40 would be to:

List and discuss the following: a.Rights of common stockholders b.Rights of preferred stockholders

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property,plant,equipment,and Intangible Assets

Partnership

Corporations: Stock Values,dividends,treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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