Question 1

The date on which a cash dividend becomes a binding legal obligation is the

Accepted Answer

A)   declaration date
B)   date of record
C)   payment date
D)   last day of the fiscal yearE) C) and D)
F) B) and D)

Question 2

Prepare entries to record the following:
(a)Issued 1,000 shares of $15 par common stock at $54 for cash.
(b)Issued 1,400 shares of no-par common stock in exchange for equipment with a fair market price of $24,000.
(c)Purchased 100 shares of treasury stock at $26.
(d)Sold 100 shares of treasury stock purchased in 
(c) at $29.

Accepted Answer

The answer of Prepare entries to record the following:
(a)Issued 1,000...

Question 3

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

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)   30,000E) B) and D)
F) None of the above

Question 5

A disadvantage of the corporate form of business entity is

Accepted Answer

A)   mutual agency for stockholders
B)   unlimited liability for stockholders
C)   corporations are subject to more governmental regulations
D)   the ease of transfer of ownershipE) A) and B)
F) A) and D)

Question 6

Match each of the following stockholders' equity concepts to the appropriate term (a-h) .
-Corporate income distributed to stockholders

Accepted Answer

A)  Articles of incorporation
B)  Limited liability
C)  Bylaws
D)  Corporation
E)  Public corporationF) Board of directorsG) Private corporationH) DividendsI) A) and C)
J) A) and B)

Question 7

A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9. Subsequently, the company declared a 2% stock dividend on a date when the market price was $10 per share. The effect of the declaration and issuance of the stock dividend is to

Accepted Answer

A)   decrease retained earnings, increase common stock, and increase paid-in capital
B)   increase retained earnings, decrease common stock, and decrease paid-in capital
C)   increase retained earnings, decrease common stock, and increase paid-in capital
D)   decrease retained earnings, increase common stock, and decrease paid-in capitalE) B) and C)
F) A) and D)

Question 8

Match each of the following stockholders' equity concepts to the appropriate term (a-h) .
-Shares of common stock that were issued and then reacquired by a company

Accepted Answer

A)  Cash dividend
B)  Date of record
C)  Stock Dividends Distributable
D)  Date of declaration
E)  Treasury stockF) Preferred stockG) Date of paymentH) Paid-In Capital in Excess of ParI) E) and F)
J) C) and G)

Question 9

A company has 10,000 shares of $10 par common stock outstanding. Prepare entries to record the following:
(a)Purchased 1,500 shares of treasury stock at $16. The treasury stock is accounted for by the cost method. There were no previous purchases of treasury shares.
(b)Sold 1,000 shares of treasury stock at $19.
(c)Purchased equipment for $80,000, paying $25,000 in cash and issuing 4,000 shares of common stock.
(d)Sold 500 shares of treasury stock at $14.

Accepted Answer

The answer of A company has 10,000 shares of $10...

Question 10

Under the corporate form of business organization,

Accepted Answer

A)   ownership rights are easily transferred
B)   a stockholder is personally liable for the debts of the corporation
C)   stockholders' acts can bind the corporation even though the stockholders have not been appointed as agents of the corporation
D)   stockholders wishing to sell their corporate shares must get the approval of other stockholdersE) None of the above
F) C) and D)

Question 11

A corporation purchases 10,000 shares of its own $10 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?

Accepted Answer

A)   increase by $100,000
B)   increase by $350,000
C)   decrease by $100,000
D)   decrease by $350,000E) B) and C)
F) A) and D)

Question 12

The state charter allows a corporation to issue only a certain number of shares of each class of stock. This amount of stock is called

Accepted Answer

A)   treasury stock
B)   issued stock
C)   outstanding stock
D)   authorized stockE) C) and D)
F) B) and D)

Question 13

Prepare entries to record the following selected transactions completed during the current fiscal year:Feb. 1The board of directors declared a stock split that reduced the par of common shares from $100 to $20. This action increased the number of outstanding shares to 500,000.??11Purchased 25,000 shares of the company's own stock at $44, recording the treasury stock at cost.??May 1Declared a dividend of $2.50 per share on the outstanding shares of common stock.??15Paid the dividend declared on May 1.Oct. 19Declared a 2% stock dividend on the common stock outstanding 
(the fair market value of the stock to be issued is $55.)??Nov. 12Issued the certificates for the common stock dividend declared on October 19.?

Accepted Answer

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

Question 14

Wonder Sales is authorized to issue 100,000 shares of 2%, $100 par preferred stock and 1,000,000 shares of $10 par common stock. Journalize the following transactions:​
(a) On January 2, Wonder Sales issues 5,000 shares of preferred stock for $110 per share and 65,000 shares of common stock at $10 per share.​
(b) On January 25, Wonder Sales issues 250 shares of preferred stock to Morton Law Firm for settlement of a $36,000 invoice for incorporation services.​
(c) On January 31, Wonder Sales issues 500 shares of common stock to Setup Inc. for fixtures that have a fair market value of $8,500.

Accepted Answer

The answer of Wonder Sales is authorized to issue 100,000...

Question 15

Match each of the following stockholders' equity concepts to the appropriate term (a-h) .
-A company whose shares can be bought and sold in public markets

Accepted Answer

A)  Articles of incorporation
B)  Limited liability
C)  Bylaws
D)  Corporation
E)  Public corporationF) Board of directorsG) Private corporationH) DividendsI) F) and G)
J) F) and H)

Question 16

On January 1, Vermont Corporation had 40,000 shares of $10 par value common stock issued and outstanding. All 40,000 shares had been issued in a prior period at $20 per share. On February 1, Vermont purchased 3,750 shares of treasury stock for $24 per share and later sold the treasury shares for $21 per share on March 1.​The journal entry to record the purchase of the treasury shares on February 1 would include a

Accepted Answer

A)   credit to Treasury Stock for $90,000
B)   debit to Treasury Stock for $90,000
C)   debit to a loss account for $112,500
D)   credit to a gain account for $112,500E) C) and D)
F) All of the above

Question 17

Match each of the following stockholders' equity concepts to the appropriate term (a-h) .
-Cash distribution of a company's earnings to stockholders

Accepted Answer

A)  Cash dividend
B)  Date of record
C)  Stock Dividends Distributable
D)  Date of declaration
E)  Treasury stockF) Preferred stockG) Date of paymentH) Paid-In Capital in Excess of ParI) E) and H)
J) A) and E)

Question 18

The initial owners of stock of a newly formed corporation are called directors.

Accepted Answer

A) True 
 B)False

Question 19

A stock split results in a transfer at market value from retained earnings to paid-in capital.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following would not be considered an advantage of the corporate form of organization?

Accepted Answer

A)   government regulation
B)   separate legal existence
C)   continuous life
D)   limited liability of stockholdersE) None of the above
F) A) and D)

Exam 13: Corporations: Organization, Stock Transactions, and Dividends

A corporation purchases 10,000 shares of its own $10 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?

Correct Answer
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A disadvantage of the corporate form of business entity is

Correct Answer
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Correct Answer
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Correct Answer
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A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9. Subsequently, the company declared a 2% stock dividend on a date when the market price was $10 per share. The effect of the declaration and issuance of the stock dividend is to

Correct Answer
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Match each of the following stockholders' equity concepts to the appropriate term (a-h) . -Shares of common stock that were issued and then reacquired by a company

Correct Answer
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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?

Correct Answer
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The date on which a cash dividend becomes a binding legal obligation is the

Correct Answer
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Match each of the following stockholders' equity concepts to the appropriate term (a-h) . -Cash distribution of a company's earnings to stockholders

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

Correct Answer
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Match each of the following stockholders' equity concepts to the appropriate term (a-h) . -A company whose shares can be bought and sold in public markets

Correct Answer
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Correct Answer
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Under the corporate form of business organization,

Correct Answer
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Correct Answer
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The state charter allows a corporation to issue only a certain number of shares of each class of stock. This amount of stock is called

Correct Answer
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Match each of the following stockholders' equity concepts to the appropriate term (a-h) . -Corporate income distributed to stockholders

Correct Answer
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Correct Answer
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The initial owners of stock of a newly formed corporation are called directors.

Correct Answer
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A stock split results in a transfer at market value from retained earnings to paid-in capital.

Correct Answer
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Which of the following would not be considered an advantage of the corporate form of organization?

Correct Answer
verified

Exam 13: Corporations: Organization, Stock Transactions, and Dividends

A corporation purchases 10,000 shares of its own $10 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?

Correct AnswerverifiedShow Answer

A disadvantage of the corporate form of business entity is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9. Subsequently, the company declared a 2% stock dividend on a date when the market price was $10 per share. The effect of the declaration and issuance of the stock dividend is to

Correct AnswerverifiedShow Answer

Match each of the following stockholders' equity concepts to the appropriate term (a-h) . -Shares of common stock that were issued and then reacquired by a company

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

The date on which a cash dividend becomes a binding legal obligation is the

Correct AnswerverifiedShow Answer

Match each of the following stockholders' equity concepts to the appropriate term (a-h) . -Cash distribution of a company's earnings to stockholders

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Match each of the following stockholders' equity concepts to the appropriate term (a-h) . -A company whose shares can be bought and sold in public markets

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Under the corporate form of business organization,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The state charter allows a corporation to issue only a certain number of shares of each class of stock. This amount of stock is called

Correct AnswerverifiedShow Answer

Match each of the following stockholders' equity concepts to the appropriate term (a-h) . -Corporate income distributed to stockholders

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The initial owners of stock of a newly formed corporation are called directors.

Correct AnswerverifiedShow Answer

A stock split results in a transfer at market value from retained earnings to paid-in capital.

Correct AnswerverifiedShow Answer

Which of the following would not be considered an advantage of the corporate form of organization?

Correct AnswerverifiedShow Answer

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