Exam 5: Introduction to Corporations

If Lee Inc. issues 1,000 common shares for $ 5 per share,

The feature that enables the preferred shareholders to exchange their preferred shares for common shares is the

Retractable preferred shares

The shareholders' equity section of Yessir Corporation at December 31, 2020 included the following: $ 6 preferred shares, cumulative, 10,000 shares authorized, 8,000 shares issued $ 800,000 Common shares, 250,000 shares authorized, 200,000 shares issued $ 2,000,000 Dividends were not declared on the preferred shares in 2020 and are in arrears. On September 15, 2021, the board of directors of Yessir Corporation declared dividends on the preferred shares for 2020 and 2021, to shareholders of record on October 1, 2021, payable on October 15, 2021. On November 1, 2021, the board of directors declared a $ 2 per share dividend on the common shares, payable November 30, 2021, to shareholders of record on November 15, 2021. Instructions Prepare the journal entries that should be made by Yessir Corporation in 2021 on the dates indicated below:

A factor which distinguishes the corporate form of organization from a sole proprietorship or partnership is that a

The following selected transactions pertain to the RWE Corporation: Jan 3 Issued 100,000 common shares for $ 25 cash per share. Feb 10 Issued 6,000 common shares in exchange for special purpose equipment appraised at $ 159,000. RWE Corporation's common shares have been actively traded on the stock exchange at $ 27 per share. Instructions Journalize the transactions.

The date at which ownership is determined for the purpose of determining who should receive a dividend is the

Pool Corporation is authorized to issue an unlimited number of common shares and 1,000,000 shares of preferred shares. During 2021, its first year of operation, the company had profit of 200,000. The following share transactions occurred: Instructions a) Journalize the transactions for Pool Corporation. b) Prepare the shareholders' equity section of the balance sheet, Pool has a December 31 year-end.

Under IFRS, corporations that issue shares in return for noncash assets should record the transaction at

The effect of the declaration of a cash dividend by the board of directors is to

Heinfell Inc. reported sales of $ 850,000, cost of goods sold of $ 510,000, and other expenses totalled $ 180,000. Assuming Heinfell reported net income of $ 100,000 in the year, which of the following entries reflects Heinfell's income tax expense?

Return on equity is a ratio generally used to evaluate

Profit for Sandos Inc., was $ 10,000 in 2021. Shareholders' equity was $ 100,000 at December 31 2019, $ 200,000 at December 31, 2020, and $ 300,000 at December 31, 2021. Return on equity for 2021 is

If preferred shares are cumulative, the

There is no obligation to pay dividends until a dividend is declared by the board of directors.

Convertible preferred shares give common shareholders the option of exchanging their bonds for preferred shares.

Which of the following best represents the guidance provided by IFRS when accounting for shares issued for noncash consideration?

Raven Corporation is authorized to issue 2,000,000, common shares. During its first three years of operation, Raven issued 1,200,000 shares at $ 15 per share. In 2021, Raven issued an additional 5,000 shares in return for equipment with a fair value of $ 75,000. The market price of the shares was $ 16 at the time of the sale. Instructions Based on the above information, answer the following questions: a) How many shares are authorized at the end of 2021? b) How many shares are issued at the end of 2021? c) What is the value of the Common Shares account at the end of 2021?

Burbon Ltd. is a private company reporting under ASPE. The adjusted trial balance at its fiscal year end, December 31, 2021, is shown below: Instructions a) Prepare a statement of retained earnings. b) Journalize the closing entries.