Question 1

The declaration of cash dividends reduces retained earnings.

Accepted Answer

A) True 
 B)False

Question 2

The achievement of an increased return on common shares by paying dividends on preferred shares or interest at a rate that is less than the rate of return earned with the assets invested in the corporation by the preferred shareholders or creditors is called

Accepted Answer

A) Financial leverage 
B) Contributed capital 
C) No par value 
D) Preemptive right 
E) Capital gain 
A) Financial leverage 
B) Contributed capital 
C) No par value 
D) Preemptive right 
E) Capital gain

Question 3

Unpaid preferred dividends are called dividends in arrears.

Accepted Answer

A) True 
 B)False

Question 4

A proxy is

Accepted Answer

A) A legal document that gives an agent of a shareholder the power to exercise the voting rights of that shareholder's shares 
B) A contractual commitment by an investor to purchase unissued shares and become a shareholder 
C) An amount of assets defined by law that shareholders must invest and leave invested in a corporation 
D) The right of common shareholders to protect their proportionate interests in a corporation by having the first opportunity to purchase additional shares of common shares issued by the corporation 
E) An arbitrary value a corporation places on each of the corporation's shares 
A) A legal document that gives an agent of a shareholder the power to exercise the voting rights of that shareholder's shares 
B) A contractual commitment by an investor to purchase unissued shares and become a shareholder 
C) An amount of assets defined by law that shareholders must invest and leave invested in a corporation 
D) The right of common shareholders to protect their proportionate interests in a corporation by having the first opportunity to purchase additional shares of common shares issued by the corporation 
E) An arbitrary value a corporation places on each of the corporation's shares

Question 5

The equity of a corporation changes because of profits or losses,distributions of incomes (dividends)and shareholder investments.

Accepted Answer

A) True 
 B)False

Question 6

Wilcox Limited,since it was organized in January 2020,has had outstanding 1,200,$15,preferred shares,and 15,000 common shares.The corporation declared and paid dividends each year as shown below.Calculate the total dividends distributed to each class of shares under each of the assumptions given.

Accepted Answer

The answer of Wilcox Limited,since it was organized in January...

Question 7

Prepare journal entries to record the following transactions that occurred during the first 2 months of operations:
 $\begin{array}{|l|l|}
\hline \text { Jan-10 } & \text { Sold } 95,000 \text { common shares for } \$ 8 \text { per share cash. } \
\hline 15 & \begin{array}{l}
\text { Exchanged 3,000 preferred shares for equipment with a fair market value of } \
\$ 45,000
\end{array} \
\hline \text { Feb-01 } & \begin{array}{l}
\text { Exchanged } 500 \text { preferred shares for legal fees incurred during organization } \
\text { worth } \$ 6,000 .
\end{array} \
\hline
\end{array}$

Accepted Answer

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

Question 8

Cumulative preferred shares carry the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders.

Accepted Answer

A) True 
 B)False

Question 9

If a corporation that has only one class of shares,or if there is more than one class,the class that has no preference over the other classes of shares,is called

Accepted Answer

A) Preferred shares 
B) Common shares 
C) Convertible preferred shares 
D) Cumulative preferred shares 
E) Participating preferred shares 
A) Preferred shares 
B) Common shares 
C) Convertible preferred shares 
D) Cumulative preferred shares 
E) Participating preferred shares

Question 10

The accounting equation for a corporation is

Accepted Answer

A) Assets = Equity + Liabilities 
B) Assets - Liabilities = Equity 
C) Assets = Liabilities + Equity 
D) All of these 
E) None of these 
A) Assets = Equity + Liabilities 
B) Assets - Liabilities = Equity 
C) Assets = Liabilities + Equity 
D) All of these 
E) None of these

Question 11

A new corporation ended its first year of operations with assets of $100,000,liabilities of $75,000,and contributed capital (common shares)of $10,000.What was the corporation's profit for the year?

Accepted Answer

A) $25,000 
B) $65,000 
C) $90,000 
D) $75,000 
E) $15,000 
A) $25,000 
B) $65,000 
C) $90,000 
D) $75,000 
E) $15,000

Question 12

Barb Inc issued 500 common shares in payment of a $1,900 bill from its accountant for assistance in filing its charter.The entry to record this transaction will include

Accepted Answer

A) A $1,900 credit to Common Shares 
B) A $1,900 credit to Organization Costs 
C) A $1,900 debit to Common Shares 
D) A $1,900 debit to Legal Expense 
E) A $1,900 debit to Accounting Expense 
A) A $1,900 credit to Common Shares 
B) A $1,900 credit to Organization Costs 
C) A $1,900 debit to Common Shares 
D) A $1,900 debit to Legal Expense 
E) A $1,900 debit to Accounting Expense

Question 13

The following account balances for Sugar Pop Corporation are for the year ended December 31,2021.Complete an Income Statement for the year assuming the income tax rate is 20%.

Accepted Answer

The answer of The following account balances for Sugar Pop...

Question 14

One of the preference rights for preferred shares is the right to vote.

Accepted Answer

A) True 
 B)False

Question 15

Parker Corp has 1,000 $5,noncumulative,preferred shares outstanding,and $250,000 worth of common shares outstanding.During Parker's first year of operation,no dividends were paid,but during the second year,the company paid dividends of $45,000.How should the dividends be distributed?

Accepted Answer

Preferred: 1,000 × $

Question 16

Sushi Corporation received its charter and began business in 2020.The company was authorized to issue 100,000,$5,cumulative,preferred shares and 500,000 common shares.Prepare journal entries to record the following transactions that occurred during 2020:
 $\begin{array}{|l|l|}
\hline \text { Apr-05 }&\text { Sold 5, } 000 \text { common shares for } \$ 15 \text { per share. }\
\hline \text { May-14 } & \begin{array}{l}
\text { Issued } 750 \text { common shares in exchange for legal services worth } \$ 11,250 \
\text { relating to organization of the corporation }
\end{array} \
\hline \text {jun-23 } & \text { Sold } 250 \text { preferred shares for } \$ 24 \text { per share, cash. }\\hline 
\end{array}$

Accepted Answer

The answer of Sushi Corporation received its charter and began...

Question 17

Hex Corporation showed the following amounts in the equity section of its balance sheet at January 1, 2021:
$\begin{array}{|l|r|}
\hline \text { Preferred Shares, } \$ 2 \text { cumulative (in arrears for 2020), 10,000 shares issued } & \$ 500,000 \
\hline \text { Common shares } 40,000 \text { shares issued } & \$ 800,000 \
\hline \text { Retained Earnings } & \$ 500,000 \
\hline
\end{array}$
In 2021: On Jan. 20, 2021, 10,000 common shares were issued for $150,000. On Nov. 1, 2021, Cash dividends of $90,000 were declared. Dividends will be paid on January 18, 2022. On Dec. 31, 2021 Hex reported revenues of $150,000 and expenses of $80,000 for the year.

-What is the average issue price per common share for 2021?

Accepted Answer

$19 per co

Question 18

Discuss the differences between common and preferred shares.

Accepted Answer

Both common and preferred shares represe

Question 19

The preemptive right is the right of preferred shareholders to

Accepted Answer

A) Actively participate in the company decision making process 
B) Share proportionately in any new sale of shares 
C) Share in the profits and losses of the company 
D) Receive dividends before the common shareholders receive 
E) None of the choices 
A) Actively participate in the company decision making process 
B) Share proportionately in any new sale of shares 
C) Share in the profits and losses of the company 
D) Receive dividends before the common shareholders receive 
E) None of the choices

Question 20

Whether a business is organized as a corporation or as a proprietorship,the profit reported on the income statement will be the same.

Accepted Answer

A) True 
 B)False

The declaration of cash dividends reduces retained earnings.

The achievement of an increased return on common shares by paying dividends on preferred shares or interest at a rate that is less than the rate of return earned with the assets invested in the corporation by the preferred shareholders or creditors is called

Unpaid preferred dividends are called dividends in arrears.

A proxy is

The equity of a corporation changes because of profits or losses,distributions of incomes (dividends)and shareholder investments.

Wilcox Limited,since it was organized in January 2020,has had outstanding 1,200,$15,preferred shares,and 15,000 common shares.The corporation declared and paid dividends each year as shown below.Calculate the total dividends distributed to each class of shares under each of the assumptions given.

Cumulative preferred shares carry the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders.

If a corporation that has only one class of shares,or if there is more than one class,the class that has no preference over the other classes of shares,is called

The accounting equation for a corporation is

A new corporation ended its first year of operations with assets of $100,000,liabilities of $75,000,and contributed capital (common shares)of $10,000.What was the corporation's profit for the year?

Barb Inc issued 500 common shares in payment of a $1,900 bill from its accountant for assistance in filing its charter.The entry to record this transaction will include

The following account balances for Sugar Pop Corporation are for the year ended December 31,2021.Complete an Income Statement for the year assuming the income tax rate is 20%.

One of the preference rights for preferred shares is the right to vote.

Parker Corp has 1,000 $5,noncumulative,preferred shares outstanding,and $250,000 worth of common shares outstanding.During Parker's first year of operation,no dividends were paid,but during the second year,the company paid dividends of $45,000.How should the dividends be distributed?

Discuss the differences between common and preferred shares.

The preemptive right is the right of preferred shareholders to

Whether a business is organized as a corporation or as a proprietorship,the profit reported on the income statement will be the same.

Property, plant and Equipment Intangibles

Current Liabilities

Partnerships

Corporate Reporting: Income, earnings Per Share, and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters

Exam 4: Organization and Operation of Corporations

The declaration of cash dividends reduces retained earnings.

The achievement of an increased return on common shares by paying dividends on preferred shares or interest at a rate that is less than the rate of return earned with the assets invested in the corporation by the preferred shareholders or creditors is called

Unpaid preferred dividends are called dividends in arrears.

A proxy is

The equity of a corporation changes because of profits or losses,distributions of incomes (dividends)and shareholder investments.

Wilcox Limited,since it was organized in January 2020,has had outstanding 1,200,$15,preferred shares,and 15,000 common shares.The corporation declared and paid dividends each year as shown below.Calculate the total dividends distributed to each class of shares under each of the assumptions given.

Cumulative preferred shares carry the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders.

If a corporation that has only one class of shares,or if there is more than one class,the class that has no preference over the other classes of shares,is called

The accounting equation for a corporation is

A new corporation ended its first year of operations with assets of $100,000,liabilities of $75,000,and contributed capital (common shares)of $10,000.What was the corporation's profit for the year?

Barb Inc issued 500 common shares in payment of a $1,900 bill from its accountant for assistance in filing its charter.The entry to record this transaction will include

The following account balances for Sugar Pop Corporation are for the year ended December 31,2021.Complete an Income Statement for the year assuming the income tax rate is 20%.

One of the preference rights for preferred shares is the right to vote.

Parker Corp has 1,000 $5,noncumulative,preferred shares outstanding,and $250,000 worth of common shares outstanding.During Parker's first year of operation,no dividends were paid,but during the second year,the company paid dividends of $45,000.How should the dividends be distributed?

Discuss the differences between common and preferred shares.

The preemptive right is the right of preferred shareholders to

Whether a business is organized as a corporation or as a proprietorship,the profit reported on the income statement will be the same.

Property, plant and Equipment Intangibles

Current Liabilities

Partnerships

Corporate Reporting: Income, earnings Per Share, and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters