Exam 11: Contributed Capital

A corporation's residual equity is its

Start-up and organization costs for a corporation that is to operate a retail store would include the costs of

Which of the following statements is true of stock option plans?

Duncan Corporation has 2,000 shares of $100 par value,6 percent cumulative preferred stock and 20,000 shares of $10 par value common stock outstanding.In its first four years of operation,Duncan Corporation paid cash dividends as follows: 2007,$15,000; 2008,$0; 2009,$20,000; 2010,$25,000.Calculate the total cash dividends received by owners of preferred and common stock in each year.

Which of the following is the appropriate entry to record the declaration of cash dividends?

Dividends in arrears are forfeited when a corporation calls in its preferred stock.

The Additional Paid-in Capital account normally arises in the accounting records when

Prepare in proper form the stockholders' equity section of the balance sheet from the following selected accounts and balances taken from the adjusted trial balance of Waller Corporation as of December 31,20xx. $\text { Partial Adjusted Trial Gaalance }$ Account Debit Credit Common Stock- \ 10 par value, 90,000 shares authorized, 40,000 shares issued and outstanding 400,000 Preferred Stock- \ 100 par value, 7 percent cumulative, 50,000 shares authorized, 8,000 shares issued and outstanding 800,000 Additional Paid-in Capital, Preferred 30,000 Additional Paid-in Capital, Common 200,000 Retained Earnings 100,000

The concept of legal capital exists to protect the corporation's assets for the stockholders of the corporation.

A disadvantage of the corporate form of business is

On its December 31,2009,balance sheet,Houston Corporation reported its stockholders' equity as follows: Common stock- \ 5 par value, 100,000 shares authorzed, 50,000 shares issued and outstanding \ 250,000 Additional paid-in capital 125,000 Retained earnings Total stockholders' equity During 2010,the following transactions occurred: Reacquired 2,500 shares at $7 per share. Sold 1,200 shares of treasury stock at $8 per share. Sold 500 shares of treasury stock at $6 per share. Net income for 2010 amounted to $80,000.No dividends were declared. Prepare the stockholders' equity section of the balance sheet as it should appear on December 31,2010.