Exam 13: Corporations

Trent Williams is a sole proprietor of a successful business.He is interested in incorporating to protect his personal assets.Which advantage of incorporation is most applicable? What are other advantages of organizing as a corporate entity?

Which of the following statements regarding earnings per share (EPS)is incorrect?

Define the following dividend dates for a cash dividend.For each date,state whether a journal entry should be recorded.In addition,if a journal entry should be record,state the effect on assets,liabilities or equity. Term Definition Should an entry be recorded? If so, what is the effect on the accounting equation? Declaration date Date of record Payment date

A corporation's income statement includes some unique items that do not often apply to smaller businesses.These items include gross profit and income from continuing operations.

A stock split decreases par value per share,whereas stock dividends do not affect par value per share.

Small stock dividends are accounted for at the stock's par value.

Both common and preferred stock carry the same degree of investment risk for the stockholder.

On March 31,2018,Water Front,Inc.shows the following data on its balance sheet: Stockholders' Equity Common Stock, \ 1 Par, 1,180,000 shares authorized 240,000 shares issued, 230,000 shares outstanding \ 240,000 Paid-In Capital in Excess of Par-Common 2,560,000 Retained Earnings 4,790,000 Treasury stock, 15,000 shares at \ 40 \ 600,000 Total Stockholder's Equity \ 6,990,000 Assume that Water Front sells 1500 shares of treasury stock at $33 per share.What is total stockholders' equity after this transaction?

A stock split can involve issuing more shares of stock than authorized in the corporate charter.

What is a prior-period adjustment? How and when is a prior-period adjustment recorded?

Discontinued operations are reported without consideration of the income tax effects.

A corporation is a business organized under federal law that is a separate legal entity.

Pumpkin Corporation issued 10,000 shares of common stock on January 1,2018.The stock has no par value and was issued at $17 per share.The journal entry for this transaction includes a ________.

Maybridge,Inc.has 3000 shares of common stock outstanding.A stockholder has 300 shares.If the company distributes a 25% stock dividend,the stockholder now holds ________ shares of Maybridge stock.

A profitable corporation may make distributions to stockholders in the form of bonuses.

Paid-in capital is externally generated capital and results from transactions with outsiders.

The issue price is the price the stock initially sells for the first time it is sold.