Exam 8: Liabilities and Stockholders Equity

Income tax based on taxable income may differ from the income tax based on "Income before Taxes" on the income statement.Which of the following could be a reason for this difference?

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 40,000 shares were originally issued and 5,000 were subsequently reacquired.What is the number of shares outstanding?

A corporation has 10,000 shares of $100 par value stock outstanding that has a current market value of $160.If the corporation issues a 4-for-1 stock split,the market value of the stock will fall to approximately $32.

The reduction in the par or stated value of common stock,accompanied by the issuance of a proportionate number of additional shares,is called a stock split.

FICA tax becomes a liability to the federal government at the time the employees are paid.

When the market rate of interest is less than the contract rate for a bond,the bond will sell for a discount.

FICA tax is a payroll tax that is paid by both the employee and the employer.

What is one reason to undergo a REVERSE stock split?

FICA tax is a payroll tax that is paid only by employers.

If a corporation issues only one class of stock,it is called

The cost of a product warranty should be included as an expense in the

Which one of the following is usually NOT necessary in order for a corporation to pay a cash dividend?

Which of the following accounts is reported in the noncurrent liabilities section of the corporate balance sheet?

If 50,000 shares are authorized,35,000 shares are issued,and 2,000 shares are reacquired,the number of outstanding shares is 33,000.

The total earnings of an employee for a payroll period are referred to as

When a corporation issues bonds,it executes a contract with the bondholders known as a bond indenture.

Most employers are levied a tax on payrolls for

Medicare taxes are paid by both the employee and the employer.

Preferred stockholders must receive their current-year dividends before the common stockholders can receive any dividends.

The amount of capital paid in by the stockholders of the corporation is called legal capital.