Question 1

Century Corporation issued 400,000 shares of $4 par value common stock at the time of its incorporation.The stock was issued for cash at a price of $16 per share.During the first year of operations,the company sustained a net loss of $100,000.The year-end balance sheet would show the balance of the Common Stock account to be:

Accepted Answer

A) $1,600,000. 
B) $1,500,000. 
C) $6,300,000. 
D) $6,400,000.

Question 2

Marks Corporation has total stockholders' equity of $7,400,000.The company has outstanding 300,000 shares of $1 par value common stock and 20,000 shares of 8% preferred stock,$100 par value.(No dividends are in arrears. )The book value per share of common stock is:

Accepted Answer

A) $9.00. 
B) $24.06. 
C) $24.66. 
D) $18.00.

Question 3

Prepare journal entries for stockholders' equity transactions
A partial list of the ledger accounts of Skyway Corporation is shown below,followed by a list of transactions.Indicate the accounts that would be debited and credited in recording each transaction.

Accepted Answer

The answer of Prepare journal entries for stockholders' equity transactions
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Question 4

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Shown below is information relating to the stockholders' equity of Clydesdale Corporation at December 31,2015:
 
-If Clydesdale Corporation had reacquired the 8,000 shares of treasury stock early in 2018,what was the purchase price per share?

Accepted Answer

A) $2.50 per share 
B) $4.00 per share 
C) $24 per share 
D) More information is needed to determine the purchase price.

Question 5

The purchase of treasury stock for cash will have which effect upon the following items?

Accepted Answer

A) A 
B) B 
C) C 
D) D

Question 6

Which of the following is not a characteristic of most preferred stock?

Accepted Answer

A) Dividends that vary as income changes. 
B) Preference as to dividends. 
C) Preference as to assets in the event of liquidation of the company. 
D) No voting power.

Question 7

When treasury stock is reissued at a price above cost:

Accepted Answer

A) The corporation recognizes a gain to be recorded on the income statement. 
B) Total paid-in capital is increased. 
C) The re-issuance is treated as an extraordinary item in the corporation's income statement. 
D) Retained earnings is increased.

Question 8

Treasury stock:

Accepted Answer

A) Is an asset. 
B) Increases total stockholders' equity. 
C) Decreases total stockholders' equity. 
D) Does not change total stockholders' equity.

Question 9

Treasury stock transactions
Jackson Corporation engaged in the following treasury stock transactions during the current year:
  Complete the following three general journal entries to record these treasury stock transactions.

Accepted Answer

The answer of Treasury stock transactions
Jackson Corporation engaged in the...

Question 10

The directors of a corporation:

Accepted Answer

A) Are hired by the officers to run the business on a day-to-day basis. 
B) May not own stock in the same corporation or be officers of the same corporation. 
C) Are responsible for formulating corporate policy and for hiring corporate officers. 
D) Are elected by the shareholders to run day-to-day operations.

Question 11

Total stockholders' equity is:

Accepted Answer

A) $2,400,000. 
B) $2,460,000. 
C) $2,340,000. 
D) $2,292,000.

Question 12

The purchase of treasury stock for cash will:

Accepted Answer

A) Increase stockholders' equity. 
B) Not increase nor decrease stockholders' equity. 
C) Decrease stockholders' equity. 
D) Not change total assets.

Question 13

[The following information applies to the questions displayed below.]
Shown below is information relating to the stockholders' equity of Clydesdale Corporation at December 31,2015:
 
-The average issue price per share of the preferred stock was:

Accepted Answer

A) $40. 
B) $80. 
C) $120. 
D) $160.

Question 14

Prepare the stockholders' equity section from transaction data
Shown below is the stockholders' equity section of Jones' balance sheet at December 31,2018.  In 2018,the following events occurred:
Jones issued 2,000 shares of $5 par value common stock in exchange for legal services relating to the formation of the corporation;value of these services was set at $19,500.
Jones issued 8,000 of its 10,000 authorized shares of $8 cumulative preferred stock,$100 par value,for $108 per share.
The board of directors declared and paid dividends of $8 per share to preferred stockholders and 50 cents per share to common stockholders.
The company's net income for 2018 is $450,000.
Instructions: Complete in good form the stockholders' equity section of a balance sheet prepared for Jones at December 31,2018.

Accepted Answer

The answer of Prepare the stockholders' equity section from transaction...

Question 15

The net assets of a corporation are equal to:

Accepted Answer

A) Total assets - total liabilities. 
B) Total assets - retained earnings. 
C) Total assets + total liabilities. 
D) Total assets + retained earnings.

Question 16

Stockholders in a corporation elect the board of directors,pass the bylaws of the corporation,and hire top corporate officers and managers.

Accepted Answer

A) True 
 B)False

Question 17

Public corporations are required by law or regulation to perform all of the following except:

Accepted Answer

A) Submit much of their financial information to the SEC for review. 
B) Make regularly scheduled dividend payments to all stockholders. 
C) Have their annual financial statements audited by an independent CPA. 
D) Disclose their financial information to the public.

Question 18

An underwriter is a bank or trust company that maintains a corporation's stockholder records.

Accepted Answer

A) True 
 B)False

Question 19

Seville Corporation has net assets of $2,072,000 and paid-in capital of $700,000.The only stock issue consists of 74,000 outstanding shares of common stock.From this information,it can be deduced that the company has:

Accepted Answer

A) Retained earnings of $2,072,000. 
B) A deficit of $2,072,000. 
C) A book value of $9.46 per share of common stock. 
D) A book value of $28 per share of common stock.

Question 20

On September 1,2018,Maryland Corporation's common stock was selling at a market price of $200 per share.On that date,Maryland announced a 3 for 2 stock split.At what price would you expect the stock to trade immediately after the split goes into effect?

Accepted Answer

A) $100 per share 
B) $200 per share 
C) $133.33 per share 
D) $225 per share

Exam 11: Stockholders Equity: Paid-In Capital

Marks Corporation has total stockholders' equity of $7,400,000.The company has outstanding 300,000 shares of $1 par value common stock and 20,000 shares of 8% preferred stock,$100 par value.(No dividends are in arrears. ) The book value per share of common stock is:

Prepare journal entries for stockholders' equity transactions A partial list of the ledger accounts of Skyway Corporation is shown below,followed by a list of transactions.Indicate the accounts that would be debited and credited in recording each transaction.