Question 1

Washington Corporation issued 7,000 shares of its $28 par value common stock for $31 per share. The entry to record the issuance would include a:

Accepted Answer

A)  credit to Cash for $217,000. 
B)  credit to Common Stock for $21,000. 
C)  credit to Common Stock for $196,000. 
D)  debit to Paid-in Capital in Excess of Par Value-Common for $21,000. 
A)  credit to Cash for $217,000. 
B)  credit to Common Stock for $21,000. 
C)  credit to Common Stock for $196,000. 
D)  debit to Paid-in Capital in Excess of Par Value-Common for $21,000.

Question 2

The journal entry for the receipt of a cash payment on common stock subscriptions would include:

Accepted Answer

A)  debiting Subscriptions Receivable-Common Stock; crediting Common Stock. 
B)  debiting Common Stock; crediting Subscriptions Receivable-Common Stock. 
C)  debiting Cash; crediting Subscriptions Receivable-Common Stock. 
D)  debiting Cash; crediting Common Stock Subscribed. 
A)  debiting Subscriptions Receivable-Common Stock; crediting Common Stock. 
B)  debiting Common Stock; crediting Subscriptions Receivable-Common Stock. 
C)  debiting Cash; crediting Subscriptions Receivable-Common Stock. 
D)  debiting Cash; crediting Common Stock Subscribed.

Question 3

Retained earnings:

Accepted Answer

A)  are the same thing as cash. 
B)  are not a part of stockholders' equity. 
C)  are accumulated profits that are kept in the corporation. 
D)  represent what stockholders have invested into the corporation. 
A)  are the same thing as cash. 
B)  are not a part of stockholders' equity. 
C)  are accumulated profits that are kept in the corporation. 
D)  represent what stockholders have invested into the corporation.

Question 4

Journalize the following independent transactions:
a) Casey Company sells 300 shares of $20 par-value common stock at $20.
b) Jacob Corporation sells 100 shares of $20 par-value common stock at $30.
c) Moss Inc. sells 40 shares of no-par common stock with a $20 stated value for $30 per share.

Accepted Answer

The answer of Journalize the following independent transactions:
a) Casey Company...

Question 5

When the shares of stock are sold by the stockholder, the sale has an effect on the company's assets and liabilities.

Accepted Answer

A) True 
 B)False

Question 6

Almont Corporation is authorized to issue 2,000 shares of common stock. Record the journal entry for each of the following independent situations. Assume Almont issues 1,000 shares at $14 on August 31.
a) Common stock has a $11 per share par value.
b) Common stock has no par value and no stated amount.
c) Common stock is no-par stock with a stated value of $7 per share.

Accepted Answer

The answer of Almont Corporation is authorized to issue 2,000...

Question 7

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 8

Preferred stock that entitles its holders to any undeclared dividends accumulated before common stockholders receive dividends is:

Accepted Answer

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

Question 9

Characteristics of a corporation include:

Accepted Answer

A)  stockholders having limited liability. 
B)  direct management by the stockholders. 
C)  mutual agency. 
D)  Both A and C are correct. 
A)  stockholders having limited liability. 
B)  direct management by the stockholders. 
C)  mutual agency. 
D)  Both A and C are correct.

Question 10

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

Accepted Answer

a. The rights of common stockholders inc

Question 11

Preemptive rights allow a stockholder to:

Accepted Answer

A)  share in profits first. 
B)  maintain a proportionate ownership interest in the corporation. 
C)  vote their shares at the annual meeting. 
D)  dispose or sell their stock without notice. 
A)  share in profits first. 
B)  maintain a proportionate ownership interest in the corporation. 
C)  vote their shares at the annual meeting. 
D)  dispose or sell their stock without notice.

Question 12

Bannon Corporation has 100 shares of $47 par, 7% cumulative preferred stock and 2,900 shares of 17 par common stock. Bannon paid $19,000 in cash dividends including one-year dividends in arrears to preferred stockholders. Common stockholders will receive: (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

Accepted Answer

A)  $0. 
B)  $658. 
C)  $329. 
D)  $18,342. 
A)  $0. 
B)  $658. 
C)  $329. 
D)  $18,342.

Question 13

Double taxation is a disadvantage of a corporation.

Accepted Answer

A) True 
 B)False

Question 14

The entry to record selling 1,200 shares of no-par common stock with a stated value of $67 for $71 would be to:

Accepted Answer

A)  debit Cash $85,200; credit Common Stock $85,200. 
B)  debit Cash $80,400; credit Common Stock $80,400. 
C)  debit Cash $80,400; credit Common Stock $85,200; debit Paid-in Capital in Excess of Par Value-Common $4,800. 
D)  debit Cash $85,200; credit Common Stock $80,400; credit Paid-in Capital in Excess of Stated Value-Common $4,800. 
A)  debit Cash $85,200; credit Common Stock $85,200. 
B)  debit Cash $80,400; credit Common Stock $80,400. 
C)  debit Cash $80,400; credit Common Stock $85,200; debit Paid-in Capital in Excess of Par Value-Common $4,800. 
D)  debit Cash $85,200; credit Common Stock $80,400; credit Paid-in Capital in Excess of Stated Value-Common $4,800.

Question 15

When Common Stock is sold at a premium:

Accepted Answer

A)  an asset increases and stockholders' equity increases. 
B)  an asset increases and liabilities increase. 
C)  a liability increases and stockholders' equity increases. 
D)  an asset decreases and stockholders' equity decreases. 
A)  an asset increases and stockholders' equity increases. 
B)  an asset increases and liabilities increase. 
C)  a liability increases and stockholders' equity increases. 
D)  an asset decreases and stockholders' equity decreases.

Question 16

Dolly's Best issued 200 shares of its $6 common stock in exchange for used packaging equipment with a fair market value of $3,000. The entry to record the acquisition of the equipment would include a:

Accepted Answer

A)  debit to Equipment for $1,200. 
B)  credit to Paid-in Capital in Excess of Par Value-Common for $1,800. 
C)  credit to Common Stock for $3,000. 
D)  credit to Equipment for $3,000. 
A)  debit to Equipment for $1,200. 
B)  credit to Paid-in Capital in Excess of Par Value-Common for $1,800. 
C)  credit to Common Stock for $3,000. 
D)  credit to Equipment for $3,000.

Question 17

Tory Company received the first installment of $2,400 on a common stock subscription. The entry to record the collection would include a:

Accepted Answer

A)  debit to Subscriptions Receivable-Common Stock for $2,400. 
B)  credit to Common Stock Subscribed for $2,400. 
C)  credit to Common Stock for $2,400. 
D)  credit to Subscriptions Receivable-Common Stock for $2,400. 
A)  debit to Subscriptions Receivable-Common Stock for $2,400. 
B)  credit to Common Stock Subscribed for $2,400. 
C)  credit to Common Stock for $2,400. 
D)  credit to Subscriptions Receivable-Common Stock for $2,400.

Question 18

More stable earnings are a benefit of owning preferred stock.

Accepted Answer

A) True 
 B)False

Question 19

Using the following accounts:
Indicate the account(s) to be debited and credited to record the following transaction.
-Exchanged common stock for services of corporation organizers (valued at par).
Debit ________ Credit ________

Accepted Answer

A) Subscription receivable-common stock 
B) Cash 
C) Machinery 
D) Building 
E) Land
F)Organization costs
G)Preferred stock
H)Common stock
I)Paid in capital in excess of par value - common
J)Paid in capital in excess of par value - preferred
K)Common stock subscribed
L)Discount on common stock
M)Organization Expense 
A) Subscription receivable-common stock 
B) Cash 
C) Machinery 
D) Building 
E) Land
F)Organization costs
G)Preferred stock
H)Common stock
I)Paid in capital in excess of par value - common
J)Paid in capital in excess of par value - preferred
K)Common stock subscribed
L)Discount on common stock
M)Organization Expense

Question 20

Eight hundred shares of $22 par common stock were exchanged for a piece of equipment with a fair market value of $18,700. The journal entry to record the transaction would include a:

Accepted Answer

A)  credit to Equipment for $17,600. 
B)  debit to Common Stock for $18,700. 
C)  credit to Paid-In Capital in Excess of Par Value-Common for $1,100. 
D)  credit to Common Stock for $18,700. 
A)  credit to Equipment for $17,600. 
B)  debit to Common Stock for $18,700. 
C)  credit to Paid-In Capital in Excess of Par Value-Common for $1,100. 
D)  credit to Common Stock for $18,700.

Exam 18: Corporations: Organizations and Stock

Washington Corporation issued 7,000 shares of its $28 par value common stock for $31 per share. The entry to record the issuance would include a:

The journal entry for the receipt of a cash payment on common stock subscriptions would include:

Retained earnings:

Journalize the following independent transactions: a) Casey Company sells 300 shares of $20 par-value common stock at $20. b) Jacob Corporation sells 100 shares of $20 par-value common stock at $30. c) Moss Inc. sells 40 shares of no-par common stock with a $20 stated value for $30 per share.

When the shares of stock are sold by the stockholder, the sale has an effect on the company's assets and liabilities.

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

Preferred stock that entitles its holders to any undeclared dividends accumulated before common stockholders receive dividends is:

Characteristics of a corporation include:

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

Preemptive rights allow a stockholder to:

Double taxation is a disadvantage of a corporation.

The entry to record selling 1,200 shares of no-par common stock with a stated value of $67 for $71 would be to:

When Common Stock is sold at a premium:

Dolly's Best issued 200 shares of its $6 common stock in exchange for used packaging equipment with a fair market value of $3,000. The entry to record the acquisition of the equipment would include a:

Tory Company received the first installment of $2,400 on a common stock subscription. The entry to record the collection would include a:

More stable earnings are a benefit of owning preferred stock.

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transaction. -Exchanged common stock for services of corporation organizers (valued at par). Debit ________ Credit ________

Eight hundred shares of $22 par common stock were exchanged for a piece of equipment with a fair market value of $18,700. The journal entry to record the transaction would include a:

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

Filters

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transaction. -Exchanged common stock for services of corporation organizers (valued at par). Debit Credit