Exam 16: Contributed Capital

Exhibit 16-9 Battleground, Inc.had never had a treasury stock transaction prior to 2010.It experienced the following treasury stock transactions during 2010: Assume the cost method is used. Refer to Exhibit 16-9.The entry to record the reissuance of 400 shares on 4/8/2010 would include a

Smooth Corp.has both Class A and Class B shares of common stock.The difference between the two classes of stock is most likely related to

If a company does not maintain its treasury stock records on a specific identification basis, which of the following approaches may be used to record a reduction in the treasury stock account when the stock is reissued?

Which one of the following phrases is least desirable when describing an amount received from a sale of stock in excess of the par value of the stock?

Exhibit 16-1 Hanson Co.issued 10, 000 shares of its $5 par common stock for $15 a share.In addition, it incurred legal and accounting fees, stock certificate costs, and other related expenses totaling $8, 500. - Refer to Exhibit 16-1.Assume the sale occurred after the initial issuance at incorporation.The entry to record the sale and related expenses would include a

The legal capital of a corporation may be any of the following except

A corporation whose stock is traded on a stock exchange is called a(n)

Magic Minnows issued 400 shares of $50 par preferred stock and 800 shares of $1 par common stock in a "package" sale for $150, 000.The preferred stock market value was $88 per share, and the common stock market value was $156 per share. Required: Fill in the lines below to indicate the accounts and amounts credited in the entry to record the issuance of the stock.

Several years ago, Walker, Inc.issued 12, 000 shares of $40 par preferred stock at $60.Each share of preferred was convertible into three shares of $10 par common stock.On January 10, 2010, one-half of the preferred stock was converted. Required: Indicate the credits that should be made in the entry to record this conversion.

Which one of the following statements is not true?

On January 1, 2010, Wilson Corporation granted Emelia Walker, its president, a compensatory stock option plan to purchase 8, 000 shares of Wilson's $10 par common stock.The option price is $25 per share and the option has a fair value of $7 per option, which is exercisable on January 1, 2014, after four years of service.How much compensation expense should Wilson recognize on December 31, 2010?

Assume common stock is issued to employees as a result of exercising stock warrants issued under a noncompensatory stock option plan.Which of the following accurately describes the effect on the company's income, paid-in capital, and retained earnings, respectively?

A corporation acquired a copyright by issuing 1, 000 shares of $10 par common stock.At the time of the exchange, the stock was selling for $40 per share.The copyright had a carrying value of $8, 000 to the author.The purchasing corporation should assign to the copyright a value of

All of the following would appear in the contributed capital section of stockholders' equity on the balance sheet except

What account should be debited when stock issuance costs are associated with the initial issuance of stock at incorporation?

Exhibit 16-7 On January 1, 2010, 70 executives were granted a performance-based stock option plan that would award them each a maximum of 300 shares of $5 par common stock for $12 a share based on the increase in sales over the next three years.The fair value per option on the grant date was $16.The award table is as follows: Increase in Sales No. of Share 10\% 100 15\% 200 20\% 300 The company estimates that the sales increase will be 22% and that the annual employee turnover rate will be 2%. - Refer to Exhibit 16-7.The compensation expense for 2011 is (to the nearest dollar)

Exhibit 16-6 On January 1, 2010, 50 executives were given a performance-based stock option plan that would award them with a maximum of 200 shares of $10 par common stock for $20 a share.On the grant date, the fair value of an option was $16.50.The number of options that will vest depends on the size of the annual average increase in sales over the next three years according to the following table: Anmual Average Increase in Sales No. of Shares Greater than 5 \% 50 Greater than 10\% 100 Greater than 150\% 200 On the grant date, the company estimates the annual average sales increase will be 12%. - Refer to Exhibit 16-6.The estimated total compensation cost will be

Enterprise Leasing issued 500 shares of $20 par value convertible preferred stock at $22 per share.Each preferred share is converted to 7 shares of $4 par value common stock.The entry to record this conversion would include a

Dividends in arrears pertain to

In the financial statements, dividends in arrears on cumulative preferred stock should be