Question 1

Which of the following amounts should be disclosed in the stockholders' equity section of the balance sheet?

Accepted Answer

A) the number of shares of common stock outstanding 
B) the number of shares of common stock issued 
C) the number of shares of common stock authorized 
D) all of the above

Question 2

The par value of common stock must always be equal to its market value on the date the stock is issued.

Accepted Answer

A) True 
 B)False

Question 3

When no-par common stock with a stated value is issued for cash,the common stock account is credited for an amount equal to the cash proceeds.

Accepted Answer

A) True 
 B)False

Question 4

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 30,000 shares were originally issued and 5,000 were subsequently reacquired.What is the number of shares outstanding?

Accepted Answer

A) 35,000 
B) 70,000 
C) 25,000 
D) 30,000

Question 5

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Accepted Answer

A) decrease total liabilities and stockholders' equity. 
B) increase total expenses and total liabilities. 
C) increase total assets and stockholders' equity. 
D) decrease total assets and stockholders' equity.

Question 6

Alma Corp.issues 1,000 shares of $10 par value common stock at $14 per share. When the transaction is recorded,credits are made to:

Accepted Answer

A) Common Stock $14,000. 
B) Common Stock $10,000 and Paid-in Capital in Excess of Par Value $4,000. 
C) Common Stock $4,000 and Paid-in Capital in Excess of Stated Value $10,000. 
D) Common Stock $10,000 and Retained Earnings $4,000.

Question 7

If paid-in-capital in excess of par/preferred stock is $30,000,preferred stock is $200,000,paid-in-capital in excess of par/common stock is $20,000,common stock is $525,000,and retained earnings is $105,000 (deficit),the total stockholders' equity is $880,000.

Accepted Answer

A) True 
 B)False

Question 8

A corporation has 60,000 shares of $25 par value stock outstanding that has a current market value of $120.If the corporation issues a 5-for-1 stock split,the number of shares outstanding will be:

Accepted Answer

A) 60,000 
B) 10,000 
C) 300,000 
D) 30,000

Question 9

Morocco Inc.reported the following results for the year ending April 30,2014:
  
Prepare a retained earnings statement for the fiscal year ended April 30,2014.

Accepted Answer

The answer of Morocco Inc.reported the following results for the...

Question 10

Prepare entries to record the following:

Accepted Answer

The answer of Prepare entries to record the following:
 ...

Question 11

Par value

Accepted Answer

A) is the monetary value assigned per share in the corporate charter. 
B) represents what a share of stock is worth. 
C) represents the original selling price for a share of stock. 
D) is established for a share of stock after it is issued.

Question 12

Merritt Company acquired a building valued at $210,000 for property tax purposes in exchange for 12,000 shares of its $5 par common stock.The stock is widely traded and selling for $18 per share.At what amount should the building be recorded by Merritt Company?

Accepted Answer

A) $60,000 
B) $216,000 
C) $210,000 
D) $156,000

Question 13

A corporation is a separate entity for accounting purposes but not for legal purposes.

Accepted Answer

A) True 
 B)False

Question 14

Cash dividends become a liability to a corporation on the date of record.

Accepted Answer

A) True 
 B)False

Question 15

If Everly Company issues 1,000 shares of $5 par value common stock for $75,000,the account

Accepted Answer

A) Common Stock will be credited for $75,000. 
B) Paid-in Capital in excess of Par Value will be credited for $5,000. 
C) Paid-in Capital in excess of Par Value will be credited for $70,000. 
D) Cash will be debited for $70,000.

Question 16

On May 10,a company issued for cash 1,500 shares of no-par common stock (with a stated value of $2)at $14,and on May 15,it issued for cash 2,000 shares of $15 par preferred stock at $58.
Journalize the entries for May 10 and 15,assuming that the common stock is to be credited with the stated value.

Accepted Answer

The answer of On May 10,a company issued for cash...

Question 17

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.

Accepted Answer

A) True 
 B)False

Question 18

On February 1 of the current year,Motor,Inc.issued 700 shares of $2 par common stock to an attorney in return for preparing and filing the Articles of Incorporation.The value of the services is $9,600.Journalize this transaction.

Accepted Answer

The answer of On February 1 of the current year,Motor,Inc.issued...

Question 19

Sabas Company has 20,000 shares of $100 par,2% cumulative preferred stock and 100,000 shares of $50 par common stock.The following amounts were distributed as dividends:
  
Determine the dividends per share for preferred and common stock for each year.

Accepted Answer

The answer of Sabas Company has 20,000 shares of $100...

Question 20

The authorized stock of a corporation

Accepted Answer

A) must be recorded in a formal accounting entry. 
B) only reflects the initial capital needs of the company. 
C) is indicated in its by-laws. 
D) is indicated in its charter.

Exam 11: Corporations: Organization, stock Transactions, and Dividends

Which of the following amounts should be disclosed in the stockholders' equity section of the balance sheet?

The par value of common stock must always be equal to its market value on the date the stock is issued.

When no-par common stock with a stated value is issued for cash,the common stock account is credited for an amount equal to the cash proceeds.

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 30,000 shares were originally issued and 5,000 were subsequently reacquired.What is the number of shares outstanding?

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Alma Corp.issues 1,000 shares of $10 par value common stock at $14 per share. When the transaction is recorded,credits are made to:

If paid-in-capital in excess of par/preferred stock is $30,000,preferred stock is $200,000,paid-in-capital in excess of par/common stock is $20,000,common stock is $525,000,and retained earnings is $105,000 (deficit),the total stockholders' equity is $880,000.

A corporation has 60,000 shares of $25 par value stock outstanding that has a current market value of $120.If the corporation issues a 5-for-1 stock split,the number of shares outstanding will be:

Morocco Inc.reported the following results for the year ending April 30,2014: Prepare a retained earnings statement for the fiscal year ended April 30,2014.

Prepare entries to record the following:

Par value

Merritt Company acquired a building valued at $210,000 for property tax purposes in exchange for 12,000 shares of its $5 par common stock.The stock is widely traded and selling for $18 per share.At what amount should the building be recorded by Merritt Company?

A corporation is a separate entity for accounting purposes but not for legal purposes.

Cash dividends become a liability to a corporation on the date of record.

If Everly Company issues 1,000 shares of $5 par value common stock for $75,000,the account

On May 10,a company issued for cash 1,500 shares of no-par common stock (with a stated value of $2)at $14,and on May 15,it issued for cash 2,000 shares of $15 par preferred stock at $58. Journalize the entries for May 10 and 15,assuming that the common stock is to be credited with the stated value.

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.

On February 1 of the current year,Motor,Inc.issued 700 shares of $2 par common stock to an attorney in return for preparing and filing the Articles of Incorporation.The value of the services is $9,600.Journalize this transaction.

Sabas Company has 20,000 shares of $100 par,2% cumulative preferred stock and 100,000 shares of $50 par common stock.The following amounts were distributed as dividends: Determine the dividends per share for preferred and common stock for each year.

The authorized stock of a corporation