Exam 16: Contributed Capital

When a company pays more than the fair market value to acquire treasury stock in order to prevent a takeover attempt, the "greenmail" from the transaction is recorded as a(n)

Which of the following is not a characteristic of the corporate form of business entity?

Preferred stockholders share with common stockholders in any "extra" dividends when the preferred stock is

Which one of the following statements is false?

Wang Corporation issued 8, 000 shares of $50 par preferred stock at $74 a share.A stock warrant attached to each preferred share allows the holder to buy one share of $10 par common stock for $20.Right after issuance, the preferred stock sells ex-rights for $63 per share.The warrants began selling at $7 per warrant.The amount credited to Common Stock Warrants at issuance of the preferred stock is

Exhibit 16-3 On January 1, 2010, Hilltop, Inc.granted to a key executive a fixed compensatory option plan for 1, 000 shares of $4 par common stock for $30 a share.The fair value per option on that date was $12 per option.The service period extended through December 31, 2011. - Refer to Exhibit 16-3.Which balance sheet disclosure would be correct at December 31, 2010?

For a stock appreciation rights (SAR)compensation plan, the measurement date is the date

Exhibit 16-8 On January 1, 2010, Marietta Company granted stock appreciation rights (SARs)to the president, which permitted her to receive cash or stock for the difference between the quoted market price and $50 for 2, 000 shares of the company's stock on the exercise date.The service period ends on December 31, 2012, and the rights must be exercised by December 31, 2015.Assume that on December 31, 2013, the president exercises all of her rights and receives cash.Using an options pricing model, the estimated fair values of the SARs were as follows: J anuary 1,2010 \ 10 December 31, 2010 15 December 31, 2011 20 December 31, 2012 19 December 31, 2013 23 - Refer to Exhibit 16-8.What is the compensation expense related to the SARs for the year ending December 31, 2013?

Exhibit 16-4 On January 1, 2010, Marvel, Inc., grants a compensatory stock option plan to 10 of its executives.The plan allows each executive to buy 1, 000 shares of its $1 par common stock at $30 a share after a three-year service period.The value of each option is estimated to be $8.The company estimates it will have an annual 2% employee turnover rate during the service period. - Refer to Exhibit 16-4.What is the compensation expense for the year ended December 31, 2011?

In accounting for a stock split, a company usually

There is disagreement among accountants as to how subscriptions receivable should be reported on the balance sheet. Required: Describe three different ways in which subscriptions receivable can be reflected on the balance sheet and provide a justification for each alternative.

Under the par value method of accounting for treasury stock, the treasury stock is reported on the balance sheet as a deduction from

Shares of capital stock issued to and held by stockholders as of a specific date are Authorized Issued Outstanding Capita1 Stock Capita1Stock Capita1Stock I. Yes Yes No II. Yes Yes Yes III. No No Yes IV No No No

For a compensatory stock option plan, a formal journal entry or entries would be required for which of the following dates? Issuance of Stock Warrants on the Issuance of Stock on Grant Date the Exercise Date I. Yes Yes II. Yes No III. No No IV. No Yes

Which of the following stock option plans would involve the creation of a liability account over the life of the plan?

When recording the conversion of preferred stock into common stock, if the total contributed capital eliminated in regard to the preferred stock is less than the common stock par value, the difference is debited to

Consider each situation for Kartchner, Inc.below independently. Required:

Wade, Inc.issued 500 shares of $10 par preferred stock at $83 a share.Each share had a warrant attached that allowed the holder to purchase one share of $5 par common stock for $15.Soon after the preferred stock was issued, the preferred stock was selling ex-rights for $64 a share and the warrants for $16 each.The entry to record the issuance of the preferred stock would include a

Under the fair value method, if an executive does not exercise a stock option and it is allowed to lapse, Common Stock Option Warrants is debited.What is credited?

Which of the following is not a reason for a corporation to acquire treasury stock?