Question 1

A person who signs a(n) ____________________ contract agrees to purchase stock and pay for the shares at a later date.

Accepted Answer

The answer of A person who signs a(n) ____________________ contract...

Question 2

In respect to corporate debt, stockholders have ____________________ liability.

Accepted Answer

The answer of In respect to corporate debt, stockholders have...

Question 3

Ari Hightower owns 200 shares of preferred stock that is convertible into common stock at the rate of 3 shares for every share surrendered. If she surrenders all her preferred stock, she will have _____________________ shares of common stock.

Accepted Answer

The answer of Ari Hightower owns 200 shares of preferred...

Question 4

Stock that carries special privileges or rights is called ____________________ stock.

Accepted Answer

The answer of Stock that carries special privileges or rights...

Question 5

Santorini Corporation has outstanding 300,000 shares of $70 par-value preferred stock, issued at an average price of $84 a share. The preferred stock is convertible into common stock at the rate of four shares of common stock for each share of preferred stock. Maryann Miller owns 880 shares of the preferred stock. During the current year she decides to convert 220 shares into common stock. How many shares of common stock will she receive?

Accepted Answer

The answer of Santorini Corporation has outstanding 300,000 shares of...

Question 6

The entry to record the issuance of 500 shares of $10 par-value common stock for $14 a share consists of a debit to Cash for $7,000 and a credit to Common Stock for

Accepted Answer

A)  $5,000 and a credit to Treasury Stock for $2,000. 
B)  $5,000 and a credit to Paid-in Capital in Excess of Par Value-Common Stock for $2,000. 
C)  $5,000 and a credit to Gain on Sale of Common Stock for $2,000. 
D)  $7,000. 
A)  $5,000 and a credit to Treasury Stock for $2,000. 
B)  $5,000 and a credit to Paid-in Capital in Excess of Par Value-Common Stock for $2,000. 
C)  $5,000 and a credit to Gain on Sale of Common Stock for $2,000. 
D)  $7,000.

Question 7

Which of the following statements is correct?

Accepted Answer

A)  Shareholders have personal liability for a corporation's debts. 
B)  Shareholders must obtain the consent of other shareholders to sell their shares or buy more shares. 
C)  Limited liability partnership (LLP) partners have liability for their own actions and the actions of those under their control or supervision. 
D)  Shareholders are legally prohibited from acting as an officer or employee of a corporation. 
A)  Shareholders have personal liability for a corporation's debts. 
B)  Shareholders must obtain the consent of other shareholders to sell their shares or buy more shares. 
C)  Limited liability partnership (LLP) partners have liability for their own actions and the actions of those under their control or supervision. 
D)  Shareholders are legally prohibited from acting as an officer or employee of a corporation.

Question 8

The stockholders of a corporation

Accepted Answer

A)  have no personal liability for the debts of the corporation. 
B)  are agents of the corporation empowered to act for the firm. 
C)  cannot sell their share of stock without obtaining the agreement of other stockholders. 
D)  will receive a dividend each year. 
A)  have no personal liability for the debts of the corporation. 
B)  are agents of the corporation empowered to act for the firm. 
C)  cannot sell their share of stock without obtaining the agreement of other stockholders. 
D)  will receive a dividend each year.

Question 9

On July 1, 2013, Abbott Corporation received a subscription from Brad Jones for 1,200 shares of its $1 par-value common stock at a price of $20 a share. Jones made a payment of $10 per share on the stock at the time of the subscription. Record the receipt of the subscription and the cash payment on page 1 of a general journal. Then, using the same page of the general journal, record the payment of the balance of Jones' subscription and issuance of the stock on August 1, 2013. Omit the descriptions.

Accepted Answer

The answer of On July 1, 2013, Abbott Corporation received...

Question 10

The Odegard Corporation has outstanding 50,000 shares of 6 percent, $100 par-value, noncumulative, nonparticipating preferred stock and 100,000 shares of $2 par-value common stock, sold at an average price of $20 per share. The board of directors voted to distribute $200,000 as dividends in 2013, $400,000 in 2014, and $450,000 in 2012.
Compute the following:
1. Total dividend paid to preferred stockholders in 2013.
2. Total dividend paid to common stockholders in 2013.
3. Total dividend paid to preferred stockholders in 2014.
4. Total dividend paid to common stockholders in 2014.
5. Total dividend paid to preferred stockholders in 2012.
6. Total dividend paid to common stockholders in 2012.

Accepted Answer

1. $200,000; 2. zero

Question 11

Organization costs should be

Accepted Answer

A)  treated as an operating expense when incurred. 
B)  debited to an intangible asset account when incurred and systematically charged to expense over a period of up to 40 years. 
C)  debited to an intangible asset account when incurred and carried at the original amount until the business ceases operations. 
D)  debited to an intangible asset account when incurred and carried at the original amount until the business begins to earn a profit. 
A)  treated as an operating expense when incurred. 
B)  debited to an intangible asset account when incurred and systematically charged to expense over a period of up to 40 years. 
C)  debited to an intangible asset account when incurred and carried at the original amount until the business ceases operations. 
D)  debited to an intangible asset account when incurred and carried at the original amount until the business begins to earn a profit.

Question 12

Stockholders are the ____________________ of a corporation.

Accepted Answer

The answer of Stockholders are the ____________________ of a corporation....

Question 13

The Southeast Corporation has outstanding 40,000 shares of 12 percent, $50 par-value, noncumulative, nonparticipating preferred stock and 160,000 shares of $10 par-value common stock. The board of directors voted to distribute $240,000 as dividends in 2013, $280,000 in 2014, and $520,000 in 2012.
Compute the following:
1. Amount paid on each share of preferred stock in 2013.
2. Amount paid on each share of common stock in 2013.
3. Amount paid on each share of preferred stock in 2014.
4. Amount paid on each share of common stock in 2014.
5. Amount paid on each share of preferred stock in 2012.
6. Amount paid on each share of common stock in 2012.

Accepted Answer

1. $6.00; 2. zero; 3

Question 14

The entry to record the issuance of 2,000 shares of $10 par-value common stock for $14 a share consists of a debit to Cash for $28,000 and a credit to Common Stock for

Accepted Answer

A)  $28,000. 
B)  $20,000 and a credit to Gain on Sale of Common Stock for $8,000. 
C)  $20,000 and a credit to Treasury Stock for $8,000. 
D)  $20,000 and a credit to Paid-in Capital in Excess of Par Value-Common Stock for $8,000. 
A)  $28,000. 
B)  $20,000 and a credit to Gain on Sale of Common Stock for $8,000. 
C)  $20,000 and a credit to Treasury Stock for $8,000. 
D)  $20,000 and a credit to Paid-in Capital in Excess of Par Value-Common Stock for $8,000.

Question 15

If preferred stock is ____________________, its owners must receive the stated dividends for both the current year and any prior years in which the stated dividend was not paid before the common stockholders can receive any dividend.

Accepted Answer

The answer of If preferred stock is ____________________, its owners...

Question 16

Contreras Corporation issued 10,000 shares of its no-par-value common stock (stated value, $3) for cash at $30 a share. Record the issuance of the stock on page 1 of a general journal. Omit the description.

Accepted Answer

The answer of Contreras Corporation issued 10,000 shares of its...

Question 17

The ability to convert preferred stock to common stock can make the preferred stock less attractive to investors.

Accepted Answer

A) True 
 B)False

Question 18

An investor agrees to pay a preferred stock subscription in two monthly installments. Each collection will include a debit to Cash and a credit to

Accepted Answer

A)  Preferred Stock. 
B)  Preferred Stock Subscribed. 
C)  Subscriptions Receivable-Preferred. 
D)  Common Stock Subscribed. 
A)  Preferred Stock. 
B)  Preferred Stock Subscribed. 
C)  Subscriptions Receivable-Preferred. 
D)  Common Stock Subscribed.

Question 19

McDougall Corporation issued 40,000 shares of its $2 par-value common stock for cash at $20 a share. Record the issuance of the stock on page 1 of a general journal. Omit the description.

Accepted Answer

The answer of McDougall Corporation issued 40,000 shares of its...

Question 20

Which of the following statements is correct?

Accepted Answer

A)  Market value is the figure selected by the organizers of the corporation to be assigned to each share of stock for accounting purposes. 
B)  If there is only one class of stock, the stock is called preferred stock. 
C)  The authorized capital stock is the number of shares that have been issued and are still in the hands of stockholders. 
D)  In the event of liquidation, preferred stockholders have a claim on assets before that of common stockholders. 
A)  Market value is the figure selected by the organizers of the corporation to be assigned to each share of stock for accounting purposes. 
B)  If there is only one class of stock, the stock is called preferred stock. 
C)  The authorized capital stock is the number of shares that have been issued and are still in the hands of stockholders. 
D)  In the event of liquidation, preferred stockholders have a claim on assets before that of common stockholders.

A person who signs a(n) ____________________ contract agrees to purchase stock and pay for the shares at a later date.

In respect to corporate debt, stockholders have ____________________ liability.

Ari Hightower owns 200 shares of preferred stock that is convertible into common stock at the rate of 3 shares for every share surrendered. If she surrenders all her preferred stock, she will have _____________________ shares of common stock.

Stock that carries special privileges or rights is called ____________________ stock.

The entry to record the issuance of 500 shares of $10 par-value common stock for $14 a share consists of a debit to Cash for $7,000 and a credit to Common Stock for

Which of the following statements is correct?

The stockholders of a corporation

Organization costs should be

Stockholders are the ____________________ of a corporation.

The entry to record the issuance of 2,000 shares of $10 par-value common stock for $14 a share consists of a debit to Cash for $28,000 and a credit to Common Stock for

If preferred stock is ____________________, its owners must receive the stated dividends for both the current year and any prior years in which the stated dividend was not paid before the common stockholders can receive any dividend.

Contreras Corporation issued 10,000 shares of its no-par-value common stock (stated value, $3) for cash at $30 a share. Record the issuance of the stock on page 1 of a general journal. Omit the description.

The ability to convert preferred stock to common stock can make the preferred stock less attractive to investors.

An investor agrees to pay a preferred stock subscription in two monthly installments. Each collection will include a debit to Cash and a credit to

McDougall Corporation issued 40,000 shares of its $2 par-value common stock for cash at $20 a share. Record the issuance of the stock on page 1 of a general journal. Omit the description.

Which of the following statements is correct?

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporate Earnings and Capital Transactions

Long-Term Bonds

Financial Statement Analysis

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Controlling Manufacturing Costs: Standard Costs

Cost-Revenue Analysis for Decision Making

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Exam 20: Corporations: Formation and Capital Stock Transactions

A person who signs a(n) ____________________ contract agrees to purchase stock and pay for the shares at a later date.

In respect to corporate debt, stockholders have ____________________ liability.

Ari Hightower owns 200 shares of preferred stock that is convertible into common stock at the rate of 3 shares for every share surrendered. If she surrenders all her preferred stock, she will have _____________________ shares of common stock.

Stock that carries special privileges or rights is called ____________________ stock.

The entry to record the issuance of 500 shares of $10 par-value common stock for $14 a share consists of a debit to Cash for $7,000 and a credit to Common Stock for

Which of the following statements is correct?

The stockholders of a corporation

Organization costs should be

Stockholders are the ____________________ of a corporation.

The entry to record the issuance of 2,000 shares of $10 par-value common stock for $14 a share consists of a debit to Cash for $28,000 and a credit to Common Stock for

If preferred stock is ____________________, its owners must receive the stated dividends for both the current year and any prior years in which the stated dividend was not paid before the common stockholders can receive any dividend.

Contreras Corporation issued 10,000 shares of its no-par-value common stock (stated value, $3) for cash at $30 a share. Record the issuance of the stock on page 1 of a general journal. Omit the description.

The ability to convert preferred stock to common stock can make the preferred stock less attractive to investors.

An investor agrees to pay a preferred stock subscription in two monthly installments. Each collection will include a debit to Cash and a credit to

McDougall Corporation issued 40,000 shares of its $2 par-value common stock for cash at $20 a share. Record the issuance of the stock on page 1 of a general journal. Omit the description.

Which of the following statements is correct?

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporate Earnings and Capital Transactions

Long-Term Bonds

Financial Statement Analysis

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Controlling Manufacturing Costs: Standard Costs

Cost-Revenue Analysis for Decision Making

Filters