Question 1

A company has 10,000 shares of $10 par common stock outstanding. Prepare entries to record the following:

Accepted Answer

(a)
 @#IMG-DLM&_TB2085_00_TB2085_00 (b)

Question 2

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Accepted Answer

A)  decrease total liabilities and stockholders' equity. 
B)  increase total expenses and total liabilities. 
C)  increase total assets and stockholders' equity. 
D)  decrease total assets and stockholders' equity. 
A)  decrease total liabilities and stockholders' equity. 
B)  increase total expenses and total liabilities. 
C)  increase total assets and stockholders' equity. 
D)  decrease total assets and stockholders' equity.

Question 3

A company has 10,000 shares of $10 par common stock outstanding. Prepare entries to record the following:

Accepted Answer

(a)
 @#IMG-DLM&_TB2085_00_TB2085_00 (b)

Question 4

Nexis Corp. issues 1,000 shares of $15 par value common stock at $22 per share. When the transaction is recorded, credits are made to:

Accepted Answer

A)  Common Stock $15,000 and Paid-in Capital in Excess of Par Value $7,000. 
B)  Common Stock $22,000 and Retained Earnings $15,000. 
C)  Common Stock $7,000 and Paid-in Capital in Excess of Stated Value $15,000. 
D)  Common Stock $22,000. 
A)  Common Stock $15,000 and Paid-in Capital in Excess of Par Value $7,000. 
B)  Common Stock $22,000 and Retained Earnings $15,000. 
C)  Common Stock $7,000 and Paid-in Capital in Excess of Stated Value $15,000. 
D)  Common Stock $22,000.

Question 5

Merritt Company acquired a building valued at $210,000 for property tax purposes in exchange for 12,000 shares of its $5 par common stock. The stock is widely traded and selling for $18 per share. At what amount should the building be recorded by Merritt Company?

Accepted Answer

A)  $60,000 
B)  $216,000 
C)  $210,000 
D)  $156,000 
A)  $60,000 
B)  $216,000 
C)  $210,000 
D)  $156,000

Question 6

If Everly Company issues 1,000 shares of $5 par value common stock for $75,000, the account

Accepted Answer

A)  Common Stock will be credited for $75,000. 
B)  Paid-in Capital in excess of Par Value will be credited for $5,000. 
C)  Paid-in Capital in excess of Par Value will be credited for $70,000. 
D)  Cash will be debited for $70,000. 
A)  Common Stock will be credited for $75,000. 
B)  Paid-in Capital in excess of Par Value will be credited for $5,000. 
C)  Paid-in Capital in excess of Par Value will be credited for $70,000. 
D)  Cash will be debited for $70,000.

Question 7

If a company has preferred stock, the preferred stock dividend is added to net income when computing earnings per common share.

Accepted Answer

A) True 
 B)False

Question 8

The Sneed Corporation issues 10,000 shares of $50 par value preferred stock for cash at $75 per share. The entry to record the transaction will consist of a debit to Cash for $750,000 and a credit or credits to

Accepted Answer

A)  Preferred Stock for $750,000. 
B)  Preferred stock for $500,000 and Paid-in Capital in Excess of Par Value-Preferred Stock for $250,000. 
C)  Preferred Stock for $500,000 and Retained Earnings for $250,000. 
D)  Paid-in Capital from Preferred Stock for $750,000. 
A)  Preferred Stock for $750,000. 
B)  Preferred stock for $500,000 and Paid-in Capital in Excess of Par Value-Preferred Stock for $250,000. 
C)  Preferred Stock for $500,000 and Retained Earnings for $250,000. 
D)  Paid-in Capital from Preferred Stock for $750,000.

Question 9

A corporation purchased 1,000 shares of its $5 par common stock at $10 and subsequently sold 500 of the shares at $20. What is the amount of revenue realized from the sale?

Accepted Answer

A)  $0 
B)  $5,000 
C)  $2,500 
D)  $10,000 
A)  $0 
B)  $5,000 
C)  $2,500 
D)  $10,000

Question 10

Cash dividends are normally paid on shares of treasury stock.

Accepted Answer

A) True 
 B)False

Question 11

Retained earnings

Accepted Answer

A)  is the same as contributed capital 
B)  cannot have a debit balance 
C)  changes are summarized in the retained earnings statement 
D)  is equal to cash on hand 
A)  is the same as contributed capital 
B)  cannot have a debit balance 
C)  changes are summarized in the retained earnings statement 
D)  is equal to cash on hand

Question 12

Which of the following would appear as a prior-period adjustment?

Accepted Answer

A)  loss resulting from the sale of fixed assets 
B)  difference between the actual and estimated uncollectible accounts receivable 
C)  error in the computation of depreciation expense in the preceding year 
D)  loss from the restructuring of assets 
A)  loss resulting from the sale of fixed assets 
B)  difference between the actual and estimated uncollectible accounts receivable 
C)  error in the computation of depreciation expense in the preceding year 
D)  loss from the restructuring of assets

Question 13

Prepare entries to record the following:

Accepted Answer

(a)
 @#IMG-DLM&_TB2085_00_TB2085_00 (b)

Question 14

The amount of a corporation's retained earnings that has been restricted/appropriated should be reported in the notes to the financial statements.

Accepted Answer

A) True 
 B)False

Question 15

Treasury stock should be reported in the financial statements of a corporation as a(n)

Accepted Answer

A)  investment. 
B)  liability. 
C)  current asset. 
D)  deduction from stockholders's equity. 
A)  investment. 
B)  liability. 
C)  current asset. 
D)  deduction from stockholders's equity.

Question 16

Which of the following is not true of a corporation?

Accepted Answer

A)  It may enter into binding legal contracts in its own name. 
B)  It may sue and be sued. 
C)  The acts of its owners bind the corporation. 
D)  It may buy, own, and sell property. 
A)  It may enter into binding legal contracts in its own name. 
B)  It may sue and be sued. 
C)  The acts of its owners bind the corporation. 
D)  It may buy, own, and sell property.

Question 17

Prepare entries to record the following:

Accepted Answer

(a)
 @#IMG-DLM&_TB2085_00_TB2085_00 (b)

Question 18

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 40,000 shares were originally issued and 10,000 were subsequently reacquired. What is the number of shares outstanding?

Accepted Answer

A)  10,000 
B)  40,000 
C)  30,000 
D)  50,000 
A)  10,000 
B)  40,000 
C)  30,000 
D)  50,000

Question 19

The initial owners of stock of a newly formed corporation are called directors.

Accepted Answer

A) True 
 B)False

Question 20

Treasury stock which was purchased for $3,000 is sold for $3,500. As a result of these two transactions combined

Accepted Answer

A)  income will be increased by $500 
B)  stockholders' equity will be increased by $3,500 
C)  stockholders' equity will be increased by $500 
D)  stockholders' equity will not change 
A)  income will be increased by $500 
B)  stockholders' equity will be increased by $3,500 
C)  stockholders' equity will be increased by $500 
D)  stockholders' equity will not change

A company has 10,000 shares of $10 par common stock outstanding. Prepare entries to record the following:

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

A company has 10,000 shares of $10 par common stock outstanding. Prepare entries to record the following:

Nexis Corp. issues 1,000 shares of $15 par value common stock at $22 per share. When the transaction is recorded, credits are made to:

Merritt Company acquired a building valued at $210,000 for property tax purposes in exchange for 12,000 shares of its $5 par common stock. The stock is widely traded and selling for $18 per share. At what amount should the building be recorded by Merritt Company?

If Everly Company issues 1,000 shares of $5 par value common stock for $75,000, the account

If a company has preferred stock, the preferred stock dividend is added to net income when computing earnings per common share.

The Sneed Corporation issues 10,000 shares of $50 par value preferred stock for cash at $75 per share. The entry to record the transaction will consist of a debit to Cash for $750,000 and a credit or credits to

A corporation purchased 1,000 shares of its $5 par common stock at $10 and subsequently sold 500 of the shares at $20. What is the amount of revenue realized from the sale?

Cash dividends are normally paid on shares of treasury stock.

Retained earnings

Which of the following would appear as a prior-period adjustment?

Prepare entries to record the following:

The amount of a corporation's retained earnings that has been restricted/appropriated should be reported in the notes to the financial statements.

Treasury stock should be reported in the financial statements of a corporation as a(n)

Which of the following is not true of a corporation?

Prepare entries to record the following:

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 40,000 shares were originally issued and 10,000 were subsequently reacquired. What is the number of shares outstanding?

The initial owners of stock of a newly formed corporation are called directors.

Treasury stock which was purchased for $3,000 is sold for $3,500. As a result of these two transactions combined

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 13: Corporations: Organization, Stock Transactions, and Dividends

A company has 10,000 shares of $10 par common stock outstanding. Prepare entries to record the following:

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

A company has 10,000 shares of $10 par common stock outstanding. Prepare entries to record the following:

Nexis Corp. issues 1,000 shares of $15 par value common stock at $22 per share. When the transaction is recorded, credits are made to:

Merritt Company acquired a building valued at $210,000 for property tax purposes in exchange for 12,000 shares of its $5 par common stock. The stock is widely traded and selling for $18 per share. At what amount should the building be recorded by Merritt Company?

If Everly Company issues 1,000 shares of $5 par value common stock for $75,000, the account

If a company has preferred stock, the preferred stock dividend is added to net income when computing earnings per common share.

The Sneed Corporation issues 10,000 shares of $50 par value preferred stock for cash at $75 per share. The entry to record the transaction will consist of a debit to Cash for $750,000 and a credit or credits to

A corporation purchased 1,000 shares of its $5 par common stock at $10 and subsequently sold 500 of the shares at $20. What is the amount of revenue realized from the sale?

Cash dividends are normally paid on shares of treasury stock.

Retained earnings

Which of the following would appear as a prior-period adjustment?

Prepare entries to record the following:

The amount of a corporation's retained earnings that has been restricted/appropriated should be reported in the notes to the financial statements.

Treasury stock should be reported in the financial statements of a corporation as a(n)

Which of the following is not true of a corporation?

Prepare entries to record the following:

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 40,000 shares were originally issued and 10,000 were subsequently reacquired. What is the number of shares outstanding?

The initial owners of stock of a newly formed corporation are called directors.

Treasury stock which was purchased for $3,000 is sold for $3,500. As a result of these two transactions combined

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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