Exam 4: Organization and Operation of Corporations

The financial statement that shows the changes to a corporation's contributed capital is called

Diego Corp received its charter and began business in 2020.The company was authorized to issue 20,000,$5,noncumulative preferred shares and an unlimited number of common shares.Prepare journal entries to record the following transactions that occurred during 2020: Sep-01 Honoured a \ 55,000,12\%,120 note payable, in exchange for 800 preferred shares. Oct-12 Sold 1,500 preferred shares for \ 70 per share, cash Nov-03 Sold 2,000 common shares at \ 22 per share.

Hex Corporation showed the following amounts in the equity section of its balance sheet at January 1, 2021: Preferred Shares, \ 2 cumulative (in arrears for 2020), 10,000 shares issued \ 500,000 Common shares 40,000 shares issued \ 800,000 Retained Earnings \ 500,000 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. -Prepare the statement of changes in shareholders equity for the year ended Dec 31,2021

During 2020,Yee Corporation reported revenues of $327,000 and expenses of $130,000,and declared cash dividends of $65,000.Retained Earnings on January 1,2019 was $168,000.Prepare closing entries at December 31,2020.Calculate the balance in Retained Earnings on December 31,2020.

The two main areas of the equity section of a corporation's balance sheet are share capital and retained earnings.

Tempe Inc.is authorized to issue 100,000,$5,cumulative,preferred shares,and an unlimited number of common shares.Prepare journal entries to record the following transactions that occurred during the first 3 months of operations: May-05 Sold 2,000 preferred shares for \ 14 per share. Jun-16 Exchanged 4,000 preferred shares for equipment with a fair market value of \ 55,000 Jul-23 Sold 8,000 common shares and \ 21 per share.

Authorized shares are the total number of shares outstanding.

Dividends represent the distribution of profits to the managers of a corporation.

The costs of bringing a corporation into existence,including legal fees,promoters' fees,and amounts paid to the government are called

Organization costs may be paid for by giving shares to promoters of a corporation in exchange for their services in organizing the corporation.

Explain the type of information used to prepare the journal entries to record the issuance of no-par value shares.

Special rights for preferred shares may include a preference in receiving dividends and in the distribution of assets if the corporation is liquidated.

The total amount of cash and other assets received by a corporation from its shareholders in exchange for common shares is included in

Lucie Corporation was formed on January 1 of the current year.The corporate charter authorized the company to issue 100,000 common shares.During the first month of operation,the corporation issued 300 shares to its lawyer in payment of a $5,600 bill for preparing the articles of incorporation.The entry to record this transaction would include

Hex Corporation showed the following amounts in the equity section of its balance sheet at January 1, 2021: Preferred Shares, \ 2 cumulative (in arrears for 2020), 10,000 shares issued \ 500,000 Common shares 40,000 shares issued \ 800,000 Retained Earnings \ 500,000 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. -Prepare the balance sheet (partial)at Dec 31,2021

An underwriter keeps shareholder records and prepares official lists of shareholders and dividend payments.

If a corporation is authorized to issue 1,000 preferred shares,which have a current market value of $80 per share,it has $80,000 worth of shares outstanding.

On July 31,Crispy Corp declared a dividend of $0.66 per common share outstanding to the shareholders of record on August 15.The dividend will be paid on August 25.Crispy Corp has unlimited shares authorized and 80,000 shares issued and outstanding.Prepare the journal entry to record the declaration of the dividend.

Zach Sports Ltd has 1,000 shares of $5.50,cumulative preferred shares and 10,000 common shares issued and outstanding.In the previous year (which was the first year of operations),the company paid total dividends of $1,000.The amount that must be paid to the preferred shareholders in the current year before any dividend is paid to common shareholders is

On August 1,Verna Corporation issued 20,000 common shares in exchange for a building with a fair market value of $102,000.Prepare the journal entry to record the transaction.