Exam 13: Planning Equity Financing

Aslo Corporation has 10,000,000,$1 par shares of common stock authorized.A total of 6,000,000 shares have been sold to stockholders in 2001 and in 2008 Aslo purchased 50,000 of its own stock.Then in 2010 5,000 shares of the treasury shares were sold.As of the end of 2010 how many shares are issued and outstanding? Issued Outstanding

The redeemable feature of preferred stock allows the preferred stockholder:

Which of the following is not one of the advantages of the corporation as compared to sole proprietorships and partnerships?

Which of the following is true about financial leverage?

Which of the following is NOT one of the four basic rights of a corporation's common stockholders?

The Securities and Exchange Commission does not allow firms to report redeemable preferred stock in the stockholders' equity section of the balance sheet.Why do you suppose it imposes this restriction?

Which of the following statements about a limited liability partnership (LLP)is true?

John,Doe and Smitty are partners in the NoName Company.Their profit and loss sharing relationship is 7:5:3.Doe's share of a $75,000 partnership loss would be:

Russ,Adam,and Brent,who are partners in the Bowinkles Company,had ending capital balances for the current year equal to $95,000,$43,000,and $62,000,respectively.If the partners share income and losses based on the ratio of these ending capital balances,Brent's share of $95,000 in partnership income would be:

When a company borrows more money how are the debt to equity and times interest earned ratios affected? Debt to Equity Times Interest Earned

If a corporation goes out of business,whose claims would be satisfied last,if at all?

Tescott Corporation is authorized to issue 500,000 shares of $1 common stock and 50,000 shares of preferred stock.The preferred stock has a $20 par value,and a 10% dividend,is cumulative.Tescott has 100,000 shares of common stock issued and outstanding and 6,000 shares of preferred stock issued and 5,000 outstanding.The preferred stock is two years in arrears when the board of directors declares a $300,000 dividend.How much of the dividend goes to common stockholders and how much to preferred stockholders?

Treasury stock:

Creditors are interested in a corporation's stockholders' equity because

Sage,Rosemary and Thyme are partners in the Music Company.Their partnership income sharing agreement provides that Sage and Thyme are to receive salary allowances of $29,700 and $16,800,respectively,and that any remaining income or loss is to be divided equally among all partners.If the company's income was $39,000,Thyme's share would be:

Moe,Larry and Curly are partners in the 3S Company.Their profit and loss sharing relationship is 6:4:2.Larry's share of $48,000 in partnership income would be:

A stock dividend does all of the following except.

All of the following statements regarding preferred stock are false except:

Preferred stock with a $50 par value and a stated dividend of 10% that was sold for $100 would entitle the owner of one share to an annual dividend of: