Exam 13: Corporations: Organization and Capital Stock Transactions

Match the items below.

Net income retained in the corporation.

Limited liability

The amount that must be retained in the business for the protection of creditors.

Capital stock

Preferred stockholders have a right to receive current and unpaid prior-year dividends before common stockholders receive any dividends.

Board of directors

Correct Answer:

Verified

Net income retained in the corporation.

The amount that must be retained in the business for the protection of creditors.

Preferred stockholders have a right to receive current and unpaid prior-year dividends before common stockholders receive any dividends.

Creditors only have corporate assets to satisfy their claims.

Responsible to stockholders for corporate activity.

The amount assigned to each share of stock in the corporate charter.

Unit of ownership in a corporation.

Enables stockholders to maintain their same percentage ownership when new shares are issued.

Corporation's own stock that has been reacquired by the corporation but not retired.

Total amount paid-in on capital stock.

(Matching)

5.0/5

(85)

Question 41

1.Name at least three factors that influence the market value of stock. 2. Corporations acquire treasury stock for a variety of purposes. Name three reasons why treasury stock may be acquired by a corporation.

(Essay)

4.8/5

(74)

Question 42

When the selling price of treasury stock is greater than its cost the company credits the difference to

(Multiple Choice)

4.9/5

(69)

Question 43

IFRS uses each of the following terms to describe retained earnings except

(Multiple Choice)

4.9/5

(72)

Question 44

The dominant form of business organization in the United States in terms of dollar sales volume earnings and employees is

(Multiple Choice)

4.9/5

(66)

Question 45

Companies frequently issue both preferred stock and common stock. What are the major differences in the rights of stockholders between these two classes of stock?

(Essay)

4.8/5

(89)

Question 46

Ten thousand shares of treasury stock of E. Marcos Inc. previously acquired at $14 per share are sold at $20 per share. The entry to record this transaction will include a

(Multiple Choice)

4.7/5

(75)

Question 47

Westglow Corporation purchased 3000 shares of its $5 par value common stock for a cash price of $10 per share. Two months later Westglow sold the treasury stock for a cash price of $8 per share. Instructions Prepare the journal entry to record the sale of the treasury stock assuming (a) No balance in Paid-in Capital from Treasury Stock. (b) A $4000 balance in Paid-in Capital from Treasury Stock.

(Essay)

4.8/5

(84)

Question 48

Sunshine Company issued 4000 shares of its $5 par value common stock in payment of its attorney's bill of $80000. The bill was for services performed in helping the company incorporate. Crain should record this transaction by debiting

(Multiple Choice)

4.9/5

(68)

Question 49

The corporate charter of Maine Yacht Corporation allows the issuance of a maximum of 3000000 shares of $1 par value common stock. During its first three years of operation Maine issued 2200000 shares at $15 per share. It later acquired 30000 of these shares as treasury stock for $25 per share. Instructions Based on the above information answer the following questions: (a) How many shares were authorized? (b) How many shares were issued? (c) How many shares are outstanding? (d) What is the balance of the Common Stock account? (e) What is the balance of the Treasury Stock account?

(Essay)

4.9/5

(87)

Question 50

Preferred stockholders have a priority over common stockholders as to

(Multiple Choice)

4.8/5

(77)

Question 51

The following items were shown on the balance sheet of Westwind Corporation on December 31 2017: Instructions Complete the following statements and show your computations. (a) The number of shares of common stock issued was _______. (b) The number of shares of common stock outstanding was . (c) The sales price of the common stock when issued was $. (d) The cost per share of the treasury stock was $_. (e) The average issue price of the common stock was $. (f) Assuming that 25% of the treasury stock is sold at $20 per share the balance in the Treasury Stock account would be $_______.

(Essay)

5.0/5

(75)

Question 52

A corporation's own stock that has been reacquired by the corporation but not canceled is called _ and is deducted from total _____ on the balance sheet.

(Short Answer)

5.0/5

(79)

Question 53

A corporation acts under its own name rather than in the name of its stockholders.

(True/False)

4.9/5

(81)

Question 54

A corporation purchases 40000 shares of its own $15 par common stock for $30 per share recording it at cost. What will be the effect on total stockholders' equity?

(Multiple Choice)

4.9/5

(87)

Question 55

If a corporation pays taxes on its income then stockholders will not have to pay taxes on the dividends received from that corporation.

(True/False)

4.9/5

(87)

Question 56

A factor which distinguishes the corporate form of organization from a sole proprietorship or partnership is that a

(Multiple Choice)

4.9/5

(64)

Question 57

Taylor Corporation issues 20000 shares of $50 par value preferred stock for cash at $90 per share. The entry to record the transaction will consist of a debit to Cash for $1800000 and a credit or credits to

(Multiple Choice)

4.9/5

(67)

Question 58

Kagan Corporation was organized on January 2 2017. During 2017 Kagan issued 40000 shares at $24 per share purchased 6000 shares of treasury stock at $26 per share and had net income of $600000. What is the total amount of stockholders' equity at December 31 2017?

(Multiple Choice)

5.0/5

(74)

Question 59

Which of the following statements reflects the transferability of ownership rights in a corporation?

(Multiple Choice)

5.0/5

(85)

Question 60

Showing 41 - 60 of 204

Exam 13: Corporations: Organization and Capital Stock Transactions

1.Name at least three factors that influence the market value of stock. 2. Corporations acquire treasury stock for a variety of purposes. Name three reasons why treasury stock may be acquired by a corporation.

When the selling price of treasury stock is greater than its cost the company credits the difference to

IFRS uses each of the following terms to describe retained earnings except

The dominant form of business organization in the United States in terms of dollar sales volume earnings and employees is

Companies frequently issue both preferred stock and common stock. What are the major differences in the rights of stockholders between these two classes of stock?

Ten thousand shares of treasury stock of E. Marcos Inc. previously acquired at $14 per share are sold at $20 per share. The entry to record this transaction will include a

Sunshine Company issued 4000 shares of its $5 par value common stock in payment of its attorney's bill of $80000. The bill was for services performed in helping the company incorporate. Crain should record this transaction by debiting

Preferred stockholders have a priority over common stockholders as to

A corporation's own stock that has been reacquired by the corporation but not canceled is called ___________________ and is deducted from total _______________________ on the balance sheet.

A corporation acts under its own name rather than in the name of its stockholders.

A corporation purchases 40000 shares of its own $15 par common stock for $30 per share recording it at cost. What will be the effect on total stockholders' equity?

If a corporation pays taxes on its income then stockholders will not have to pay taxes on the dividends received from that corporation.

A factor which distinguishes the corporate form of organization from a sole proprietorship or partnership is that a

Taylor Corporation issues 20000 shares of $50 par value preferred stock for cash at $90 per share. The entry to record the transaction will consist of a debit to Cash for $1800000 and a credit or credits to

Kagan Corporation was organized on January 2 2017. During 2017 Kagan issued 40000 shares at $24 per share purchased 6000 shares of treasury stock at $26 per share and had net income of $600000. What is the total amount of stockholders' equity at December 31 2017?

Which of the following statements reflects the transferability of ownership rights in a corporation?

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

A corporation's own stock that has been reacquired by the corporation but not canceled is called _ and is deducted from total _____ on the balance sheet.