Exam 13: Corporations: Organization and Capital Stock Transactions

Land appraised at $60,000 is purchased by issuing 1,000 shares of $25 par value common stock. The market price of the shares at the time of the exchange, based on active trading in the securities market, is $75 per share. Should the land be recorded at $25,000, $60,000, or $75,000? Explain.

The paid-in capital section of the balance sheet consists of two classifications: ______________________ and ______________________.

Renner Corporation's December 31, 2010 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, 20,000 shares Renner's total stockholders' equity was

Andrews, Inc. paid $45,000 to buy back 9,000 shares of its $1 par value common stock. This stock was sold later at a selling price of $6 per share. The entry to record the sale includes a

Stockholders generally have the right to share in corporate _______________ and in ______________ upon liquidation.

If an investment firm underwrites a stock issue, the

Ed Tresh has invested $400,000 in a privately held family corporation. The corporation does not do well and must declare bankruptcy. What amount does Tresh stand to lose?

Which of the following statements is not considered a disadvantage of the corporate form of organization?

Which of the following represents the largest number of common shares?

Simon Company issued 4,000 shares of its $5 par value common stock in payment of its attorney's bill of $35,000. The bill was for services performed in helping the company incorporate. Simon should record this transaction by debiting

Boswell Corporation has the following stockholders' equity accounts: Preferred Stock Paid-in Capital in Excess of Par Value-Preferred Stock Common Stock Paid-in Capital in Excess of Stated Value-Common Stock Paid-in Capital from Treasury Stock-Common Retained Earnings Treasury Stock-Common Instructions Classify each account using the following tabular alignment.

Stock can be issued only in exchange for cash.

The ability of a corporation to obtain capital is

Venco Corporation's December 31, 2010 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, 10,000 shares Venco's total paid-in capital was

Owners' equity for a corporation is identified as each of the following except

The stockholders' equity section of a corporation's balance sheet is generally divided in two major sections: (1) _____________ and (2) _______________.

The trial balance of Hackman Inc. includes the following balances: Common Stock, $26,000; Paid-in Capital in Excess of Par, $64,000; Treasury Stock, $6,000; Preferred Stock, $20,000. Capital stock totals

The cost of a noncash asset acquired in exchange for common stock should be either the fair market value of the consideration given up or the consideration received, whichever is more clearly determinable.

Treasury stock should be reported in the financial statements of a corporation as a(n)

What is ordinarily the first step in the formation of a corporation?