Exam 11: Stockholders Equity

Under IFRS, an item such as a convertible bond must be separated into two parts, showing one part in the Liability category and the other part in the Stockholders' Equity category.

[APPENDIX] A sole proprietorship is a separate entity for legal purposes.

Abilene Western Shop began business on January 1, 2015.The corporate charter authorized issuance of 10,000 shares of $2 par value common stock and 4,000 shares of $8 par value, 6% cumulative preferred stock.Abilene issued 2,400 shares of common stock for cash at $20 per share on January 2, 2015.What effect does the entry to record the issuance of stock have on total stockholders' equity?

With regard to a corporation's stock, par value is

Comprehensive income is the increase in net assets resulting from all transactions occurring during an accounting period except stockholders' investments and dividends.

Which of the following is true?

Stockholders prefer to invest in preferred stock because

When a company wishes to purchase and retire its own stock, the company must

Vegan Company reported the following: Common stock, $5 par, 200,000 shares authorized, 50,000 shares issued and outstanding What is the effect of issuing 2,000 shares of common stock in exchange for land with valued by a realtor at $36,000 if the common stock sells for $12 per share and is regularly traded?

The payment of dividends is a financing activity.

None of the Stockholders' Equity accounts are affected by the stock split.

Overton Supply reported the following information at December 31, 2015: Answer the following questions for Overton Supply. 1) Assuming that all shares were sold at the same price, how much did each share of common stock originally sell for? 2) What is the total amount of contributed capital at December 31, 2015? 3) What is the amount of the book value per share at December 31, 2015? 4) Would the book value per share increase, decrease, or remain the same, if the company declared a 2-for-1 stock split on December 31, 2015? Explain.

Montana City Company began business on January 1, 2015.The corporate charter authorized issuance of 500 shares of $1 par value common stock and 400 shares of $4 par value, 3% cumulative preferred stock.What is the maximum amount that can be reported on the balance sheet for Common Stock and Preferred Stock, respectively, if all of the stock is issued?

Arco Corporation declared a cash dividend on June 2 of $6 per common share.The company has 2,000 shares of common stock authorized, 1,000 shares issued, and 200 in the treasury.The entry to record the declaration of the cash dividend increases

The characteristic where each partner is personally liable for the debts of the partnership is known as _____________________.

Stock dividends reduce the par value of the stock.

Which of the following statements is true with regard to contributed capital?

The primary reason for a stock split is to

[APPENDIX] A balance sheet of a sole proprietorship includes only the business assets and liabilities, not the personal assets of the owner.

A company may prepare a statement of retained earnings instead of a statement of stockholders' equity if the only changes in the stockholders' equity accounts that occurred during the year are earnings and dividends.