Exam 11: Proprietorships,partnerships,and Corporations

The Mason-Dixon partnership was formed on January 1,2016,when Rebecca Mason and Steve Dixon contributed cash of $40,000 and $60,000,respectively.During 2016,the partnership earned $160,000 in cash revenues and paid $108,000 in cash expenses.Mason withdrew $12,000 cash and Dixon withdrew $8,000 cash from the business.Net income was allocated to the partners' capital accounts in proportion to their initial investment in the business. Required: Prepare an income statement,capital statement,balance sheet,and statement of cash flows for the partnership for 2016.

What is a common reason for a corporation to "split" its stock?

Which of the following entities would have the "Paid-in Capital in Excess" account in the equity section of the balance sheet?

Describe cumulative preferred stock.

Treasury Stock is reported on the balance sheet between liabilities and equity.

Describe the varying degrees to which closely held corporations and publicly traded corporations are regulated.

A partner is responsible for his/her own actions,but not for actions taken by another partner on behalf of the partnership.

On July 1,2016,Village Bookstore,Inc.appropriated retained earnings in the amount of $36,000 for a future remodeling project in the basement of the bookstore.On June 30,2016,the balance of Retained Earnings was $82,800 and the Cash balance was $43,200.Which of the following answers shows the effect of the July 1 event on the financial statements?

Vailes Company reissued 200 shares of its treasury stock.The treasury stock originally cost $25 per share and was reissued for $35 per share.Select the answer that accurately reflects how the reissue of the treasury stock would affect Vailes's financial statements.

A distribution by a sole proprietorship to the owner is called a withdrawal.

At the end of the accounting period,Houston Company had $12,000 of par value common stock issued,additional paid in capital of $11,000,retained earnings of $12,000,and $4,000 of treasury stock.The total amount of stockholders' equity is:

In which section of the balance sheet would Treasury Stock be reported?

Use the following to answer questions Gilligan Corporation was established on February 15,2014.Gilligan is authorized to issue 500,000 shares of $6.00 par value common stock.As of December 2016,Gilligan's stockholders' equity accounts report the following balances: At the end of 2016,Gilligan decides to issue a 5% stock dividend. At the time of issue,the market price of the stock was $22 per share. -Calculate the number of shares outstanding after the stock dividend is issued.

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.Use only one letter for each element.You do not need to enter amounts. -Miller Co.declared and distributed a stock dividend.

Prepare journal entries for the following transactions. a)Issued 12,000 shares of $25 par value preferred stock at $40 per share. b)Issued 80,000 shares of common stock with a $10 stated value for cash of $18 per share. c)Purchased 800 shares of treasury stock (common stock)at $20 per share. d)Resold 200 shares of the treasury stock at $24 per share.

A sole proprietorship was established on January 1,2016,when it received $30,000 cash from Connor Howard,the owner.During 2016,the business earned $80,000 in cash revenues and paid $62,000 in cash expenses.Howard withdrew $9,000 from the business during 2016. Required: Indicate how each of the transactions and events for the Howard sole proprietorship affects the financial statements model,below.Indicate dollar amounts of increases and decreases.For cash flows,indicate whether each is an operating activity (OA),investing activity (IA),or financing activity (FA).Indicate NA if an element is not affected by a transaction.

Which of the following statements about types of business entities is true?

Llewelyn Company purchased 1,000 shares of its own $10 par value common stock when the market price of the stock was $36 per share.Select the journal entry that correctly records Llewelyn's purchase of treasury stock.

Establishing a sole proprietorship generally requires the owner to get a charter from the state government.

A separate capital account would be maintained for each partner in a partnership.