Question 1

Additional paid-in capital includes all of the following except

Accepted Answer

A)  paid-in capital from treasury stock. 
B)  paid-in capital in excess of par. 
C)  paid-in capital in excess of stated value. 
D)  paid-in capital in excess of book value. 
A)  paid-in capital from treasury stock. 
B)  paid-in capital in excess of par. 
C)  paid-in capital in excess of stated value. 
D)  paid-in capital in excess of book value. D

Question 2

If preferred stock is cumulative the

Accepted Answer

A)  preferred dividends not declared in a given year are called dividends in arrears. 
B)  preferred stockholders and the common stockholders receive equal dividends. 
C)  preferred stockholders and the common stockholders receive the same total dollar amount of dividends. 
D)  common stockholders will share in the preferred dividends. 
A)  preferred dividends not declared in a given year are called dividends in arrears. 
B)  preferred stockholders and the common stockholders receive equal dividends. 
C)  preferred stockholders and the common stockholders receive the same total dollar amount of dividends. 
D)  common stockholders will share in the preferred dividends. A

Question 3

Delta Corp. issues 4000 shares of $10 par value common stock at $14 per share. When the transaction is recorded credits are made to

Accepted Answer

A)  Common Stock $40000 and Paid-in Capital in Excess of Stated Value $16000. 
B)  Common Stock $56000. 
C)  Common Stock $40000 and Paid-in Capital in Excess of Par $16000. 
D)  Common Stock $40000 and Retained Earnings $16000. 
A)  Common Stock $40000 and Paid-in Capital in Excess of Stated Value $16000. 
B)  Common Stock $56000. 
C)  Common Stock $40000 and Paid-in Capital in Excess of Par $16000. 
D)  Common Stock $40000 and Retained Earnings $16000. C

Question 4

Organizational costs are capitalized by debiting an intangible asset entitled Organization Costs.

Accepted Answer

A) True 
 B)False

Question 5

The trial balance of Blowing Rock Inc. includes the following balances: Common Stock $56000; Paid-in Capital in Excess of Par $128000; Treasury Stock $12000; Preferred Stock $60000. Capital stock totals

Accepted Answer

A)  $116000. 
B)  $192000. 
C)  $244000. 
D)  $256000. 
A)  $116000. 
B)  $192000. 
C)  $244000. 
D)  $256000.

Question 6

As soon as a corporation is authorized to issue stock an accounting journal entry should be made recording the total value of the shares authorized.

Accepted Answer

A) True 
 B)False

Question 7

Zyrkel Corporation's December 31 2017 balance sheet showed the following: 8% preferred stock $20 par value cumulative 30000 shares $\begin{array}{lr}
\text {authorized; 15,000 shares issued}& \$ 300,000 \
\text {Common stock, $ \$ 10 $ parvalue, 2,000,000 shares authorized;}&\
\text {$ 1,950,000 $ shares issued, $ 1,920,000 $ shares outstanding}&19,500,000\
\text { Paid-in capital in excess of par-preferred stock } & 60,000 \
\text { Paid-in capital in excess of par-common stock } & 27,000,000 \
\text { Retained earnings } & 7,500,000 \
\text { Treasury stock (30,000 shares) } & 630,000
\end{array}$ Zyrkel total paid-in capital was

Accepted Answer

A)  $46960000. 
B)  $47590000. 
C)  $46330000. 
D)  $27060000. 
A)  $46960000. 
B)  $47590000. 
C)  $46330000. 
D)  $27060000.

Question 8

Paid-in capital from treasury stock would appear on a balance sheet under the category

Accepted Answer

A)  capital stock. 
B)  treasury stock. 
C)  additional paid-in capital. 
D)  contra to owners' equity. 
A)  capital stock. 
B)  treasury stock. 
C)  additional paid-in capital. 
D)  contra to owners' equity.

Question 9

Preferred stock has contractual provisions that give it a preference over common stock as to ___________________ and to ___________________ in the event of liquidation.

Accepted Answer

The answer of Preferred stock has contractual provisions that give...

Question 10

Abbie's Organics Corporation began business in 2017 by issuing 50000 shares of $3 par common stock for $8 per share and 20000 shares of 6% $10 par preferred stock for par. At year end the common stock had a market value of $12. On its December 31 2017 balance sheet Carson Packaging would report

Accepted Answer

A)  Common Stock of $600000. 
B)  Common Stock of $150000. 
C)  Common Stock of $400000. 
D)  Paid-In Capital of $150000. 
A)  Common Stock of $600000. 
B)  Common Stock of $150000. 
C)  Common Stock of $400000. 
D)  Paid-In Capital of $150000.

Question 11

The _______________ feature of preferred stock gives the preferred stockholders the right to receive current-year dividends and unpaid prior-year dividends before common stockholders receive any dividends.

Accepted Answer

The answer of The _______________ feature of preferred stock gives...

Question 12

The cash proceeds from issuing par value stock may be equal to or greater than but not less than par value.

Accepted Answer

A) True 
 B)False

Question 13

If common stock is issued for an amount greater than par value the excess should be credited to

Accepted Answer

A)  Cash. 
B)  Retained Earnings. 
C)  Paid-in Capital in Excess of Par. 
D)  Legal Capital. 
A)  Cash. 
B)  Retained Earnings. 
C)  Paid-in Capital in Excess of Par. 
D)  Legal Capital.

Question 14

Capital stock to which the charter has assigned a value per share is called

Accepted Answer

A)  par value stock. 
B)  no-par value stock. 
C)  stated value stock. 
D)  assigned value stock. 
A)  par value stock. 
B)  no-par value stock. 
C)  stated value stock. 
D)  assigned value stock.

Question 15

As part of a Careers in Accounting program sponsored by accounting organizations and supported by your company you will be taking a group of high school students through the accounting department in your company. You will also provide them with various materials to explain the work of an accountant. One of the materials you will provide is the Stockholders' Equity section of a recent balance sheet.
Required:
Prepare a sentence or two explaining each major section: Common Stock Additional Paid-in Capital and Retained Earnings. You should try to be brief but clear.

Accepted Answer

Common Stock: When investors invest in o

Question 16

Dividends in arrears on cumulative preferred stock

Accepted Answer

A)  are shown in stockholders' equity of the balance sheet. 
B)  must be paid before common stockholders can receive a dividend. 
C)  should be recorded as a current liability until they are paid. 
D)  enable the preferred stockholders to share equally in corporate earnings with the common stockholders. 
A)  are shown in stockholders' equity of the balance sheet. 
B)  must be paid before common stockholders can receive a dividend. 
C)  should be recorded as a current liability until they are paid. 
D)  enable the preferred stockholders to share equally in corporate earnings with the common stockholders.

Question 17

Prepare the necessary journal entry for each of the following transactions for Terpsichorp Corporation.
(a) Issued 2000 shares of its $10 par value common stock for $20 per share.
(b) Issued 5000 shares of its stock for land advertised for sale at $90000. Terpsichorp's stock is actively traded at a market price of $16 per share.

Accepted Answer

None

Question 18

The chief accounting officer in a corporation is the

Accepted Answer

A)  treasurer. 
B)  president. 
C)  controller. 
D)  vice-president of finance. 
A)  treasurer. 
B)  president. 
C)  controller. 
D)  vice-president of finance.

Question 19

IFRS treats the purchase of treasury stock as any of the following except

Accepted Answer

A)  an increase to a contra equity account. 
B)  a decrease to retained earnings. 
C)  a decrease to share capital. 
D)  a decrease to share premium. 
A)  an increase to a contra equity account. 
B)  a decrease to retained earnings. 
C)  a decrease to share capital. 
D)  a decrease to share premium.

Question 20

Under IFRS equity is described as each of the following except

Accepted Answer

A)  retained equity. 
B)  shareholders' funds. 
C)  owners' equity. 
D)  capital and reserves. 
A)  retained equity. 
B)  shareholders' funds. 
C)  owners' equity. 
D)  capital and reserves.

Exam 13: Corporations: Organization and Capital Stock Transactions

Additional paid-in capital includes all of the following except

If preferred stock is cumulative the

Delta Corp. issues 4000 shares of $10 par value common stock at $14 per share. When the transaction is recorded credits are made to

Organizational costs are capitalized by debiting an intangible asset entitled Organization Costs.

The trial balance of Blowing Rock Inc. includes the following balances: Common Stock $56000; Paid-in Capital in Excess of Par $128000; Treasury Stock $12000; Preferred Stock $60000. Capital stock totals

As soon as a corporation is authorized to issue stock an accounting journal entry should be made recording the total value of the shares authorized.

Paid-in capital from treasury stock would appear on a balance sheet under the category

Preferred stock has contractual provisions that give it a preference over common stock as to ___________________ and to ___________________ in the event of liquidation.

Abbie's Organics Corporation began business in 2017 by issuing 50000 shares of $3 par common stock for $8 per share and 20000 shares of 6% $10 par preferred stock for par. At year end the common stock had a market value of $12. On its December 31 2017 balance sheet Carson Packaging would report

The _______________ feature of preferred stock gives the preferred stockholders the right to receive current-year dividends and unpaid prior-year dividends before common stockholders receive any dividends.

The cash proceeds from issuing par value stock may be equal to or greater than but not less than par value.

If common stock is issued for an amount greater than par value the excess should be credited to

Capital stock to which the charter has assigned a value per share is called

Dividends in arrears on cumulative preferred stock

The chief accounting officer in a corporation is the

IFRS treats the purchase of treasury stock as any of the following except

Under IFRS equity is described as each of the following except

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Incremental Analysis and Capital Budgeting

Time Value of Money

Filters

Preferred stock has contractual provisions that give it a preference over common stock as to _ and to _ in the event of liquidation.