Exam 11: Proprietorships, Partnerships, and Corporations

Lenworth Company purchased 1,000 shares of its own $5 par value common stock when the market price of the stock was $18 per share. Select the journal entry that correctly records Lenworth's purchase of treasury stock.

Vernon Company reissued 200 shares of its treasury stock. The 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 Vernon's financial statements.

Minerva Company was authorized to issue 100,000 shares of common stock. The company had issued 25,000 shares of stock when it purchased 5,000 shares of treasury stock. The number of outstanding shares of common stock was:

Discuss a few of the characteristics of sole proprietorships, partnerships and corporations.

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

On December 15, 2013, the Bella Corporation established a retained earnings appropriation of $10,000 for future expansion. The balance of the retained earnings account prior to the transaction was $30,000. At December 31, 2013, the Corporation had 1,000 shares of $10 par common stock (issued at par) outstanding. The corporate charter indicates 10,000 of common stock are authorized and there is no treasury stock. Required: a) Indicate the effect of the appropriation on the financial statements. b) Record the appropriation in general journal form. c) Prepare the Stockholder's Equity section of the Bella Corporation's Balance sheet of 12/31/13.

Which of the following would not be a reason for the market price of Richards Corporation to increase?

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

Preston Caswell and Jayne Cook, both CPAs, began their new partnership by each contributing $40,000 to their business. Indicate the effects of this transaction on the financial statements.

Thomas Jeffries began his sole proprietorship on 12/28/13 by contributing $16,000 of his own money to the business. Indicate the effects of this transaction on the financial statements.

Which of the following statements about Treasury Stock is correct?

Sherman Corporation declared a 3-for-1 stock split on 8,000 shares of $7.50 par value common stock. If the market price of the stock had been $30 a share before the split, the par value, number of shares, and approximate market value after the split would be

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

The Pierre Corporation began operations on 1/1/13 by issuing 10,000 shares of no-par stock for $22 per share. Indicate the effects of this transaction on the financial statements.

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

Jackson Corporation issued 10,000 shares of $6 par common stock for $24 per share. For this transaction, Common Stock should be credited (increased) for $240,000.

A high price-earnings ratio generally means that investors are optimistic about a company's future growth.

Gaston Corporation had 20,000 shares of $10 par common stock outstanding on January 1, 2013. On June 1, 2013 Gaston purchased 2,500 shares of its own stock on the open market for $22 per share and held it as treasury stock. On October 1, 2013 Gaston declared and issued a 10% stock dividend. The fair market value of Gaston's stock was $24 per share on October 1. Gaston's board of directors declared and paid a cash dividend of $24,000 on December 15, 2013. a) Prepare the journal entry for the treasury stock purchase. b) Prepare the journal entry for the stock dividend. c) Prepare the journal entry for the cash dividend. d) What was the per-share cash dividend paid on December 15?

For 2013, the Warner Corporation had beginning and ending Retained Earnings balances of $208,054 and $231,112 respectively. Also during 2013, the corporation declared and paid cash dividends of $29,000 and issued stock dividends valued at $16,000. Total expenses were $32,916. Based on this information, what was the amount of total revenue for 2013?

The Crigler Corporation began operations on 1/1/13 by issuing 5,000 shares of $4 par-value stock at $14. Indicate the effects of this transaction on the financial statements.