Question 1

Which statement below is not a reason for a corporation to buy back its own stock.

Accepted Answer

A)  resale to employees 
B)  bonus to employees 
C)  for supporting the market price of the stock 
D)  to increase the shares outstanding 
A)  resale to employees 
B)  bonus to employees 
C)  for supporting the market price of the stock 
D)  to increase the shares outstanding

Question 2

A company had stock outstanding as follows during each of its first three years of operations: 2,500 shares of $10, $100 par, cumulative preferred stock and 50,000 shares of $10 par common stock. The amounts distributed as dividends are presented below. Determine the total and per share dividends for each class of stock for each year by completing the schedule.

Accepted Answer

The answer of A company had stock outstanding as follows...

Question 3

When common stock is issued in exchange for land, the land should be recorded in the accounts at the par amount of the stock issued.

Accepted Answer

A) True 
 B)False

Question 4

The issuance of common stock affects both paid-in capital and retained earnings.

Accepted Answer

A) True 
 B)False

Question 5

A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of $150. If the corporation issues a 5-for-1 stock split, the market value of the stock after the split will be approximately:

Accepted Answer

A)  $25 
B)  $150 
C)  $5 
D)  $30 
A)  $25 
B)  $150 
C)  $5 
D)  $30

Question 6

Which one of the following would not be considered an advantage of the corporate form of organization?

Accepted Answer

A)  Government regulation 
B)  Separate legal existence 
C)  Continuous life 
D)  Limited liability of stockholders 
A)  Government regulation 
B)  Separate legal existence 
C)  Continuous life 
D)  Limited liability of stockholders

Question 7

Which of the following is not characteristic of a corporation?

Accepted Answer

A)  The financial loss that a stockholder may suffer from owning stock in a public company is limited. 
B)  Cash dividends paid by a corporation are deductible as expenses by the corporation. 
C)  A corporation can own property in its name. 
D)  Corporations are required to file federal income tax returns. 
A)  The financial loss that a stockholder may suffer from owning stock in a public company is limited. 
B)  Cash dividends paid by a corporation are deductible as expenses by the corporation. 
C)  A corporation can own property in its name. 
D)  Corporations are required to file federal income tax returns.

Question 8

In which section of the financial statements would Paid-In Capital from Sale of Treasury Stock be reported?

Accepted Answer

A)  other expense on income statement 
B)  intangible asset on balance sheet 
C)  stockholders' equity on balance sheet 
D)  other income on income statement 
A)  other expense on income statement 
B)  intangible asset on balance sheet 
C)  stockholders' equity on balance sheet 
D)  other income on income statement

Question 9

On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with a current market price of $73. Journalize this transaction.

Accepted Answer

The answer of On April 10, a company acquired land...

Question 10

Samuels, Inc. reported net income for 2011 is $105,000. During 2011 the company had 5,000 shares of $100 par, 5% preferred stock and 20,000 of $5 par common stock outstanding. Samuels' earnings per share for 2011 is

Accepted Answer

A)  $4.00 
B)  $5.25 
C)  $6.50 
D)  $5.00 
A)  $4.00 
B)  $5.25 
C)  $6.50 
D)  $5.00

Question 11

The state charter allows a corporation to issue only a certain number of shares of each class of stock. This amount of stock is called

Accepted Answer

A)  treasury stock 
B)  issued stock 
C)  outstanding stock 
D)  authorized stock 
A)  treasury stock 
B)  issued stock 
C)  outstanding stock 
D)  authorized stock

Question 12

On February 1 of the current year, Motor, Inc. issued 500 shares of $2 par common stock to an attorney in return for preparing and filing the Articles of Incorporation. The value of the services is $8,500. Journalize this transaction.

Accepted Answer

The answer of On February 1 of the current year,...

Question 13

A prior period adjustment should be reported as an adjustment to the retained earnings balance at the beginning of the period in which the adjustment was made.

Accepted Answer

A) True 
 B)False

Question 14

Merritt Company acquired a building valued at $190,000 for property tax purposes in exchange for 12,000 shares of its $5 par common stock. The stock is widely traded and selling for $15 per share. At what amount should the building be recorded by Merritt Company?

Accepted Answer

A)  $60,000 
B)  $180,000 
C)  $190,000 
D)  $10,000 
A)  $60,000 
B)  $180,000 
C)  $190,000 
D)  $10,000

Question 15

On February 13, Epperson Company issue for cash 75,000 shares of no-par common stock (with a stated value of $125) at $140. On September 9, Epperson issued at par 15,000 share of 1%, $60 par preferred stock at par for cash On November 23, Epperson issued for cash 8,000 shares of 1%, $60 par preferred stock at $70.
Required: Journalize the entries to record the February 13, September 9 and November 23 transactions.

Accepted Answer

The answer of On February 13, Epperson Company issue for...

Question 16

The following transactions took place for the XYZ Corporation;
a. November 12th - Declared a total cash dividend of $45,000 for stockholders of record November 20th payable on December 1st. Record the journal entry, if necessary, for the following events;
Nov. 12 -
Nov. 20 -
Dec. 1 -
b. Briefly describe the significance of November 20th.

Accepted Answer

a. Nov. 12 Cash Dividends 45,000
Cash Di

Question 17

The ability of a corporation to obtain capital is

Accepted Answer

A)  less than a partnership. 
B)  about the same as a partnership. 
C)  restricted because of the limited life of the corporation. 
D)  enhanced because of limited liability and ease of share transferability. 
A)  less than a partnership. 
B)  about the same as a partnership. 
C)  restricted because of the limited life of the corporation. 
D)  enhanced because of limited liability and ease of share transferability.

Question 18

A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8. Subsequently, the company declared a 4% stock dividend on a date when the market price was $12 a share. What is the amount transferred from the Retained Earnings account to Paid-in Capital accounts as a result of the stock dividend?

Accepted Answer

A)  $12,800 
B)  $19,200 
C)  $32,000 
D)  $48,800 
A)  $12,800 
B)  $19,200 
C)  $32,000 
D)  $48,800

Question 19

A restriction/appropriation of retained earnings establishes cash assets that are set aside for a specific purpose.

Accepted Answer

A) True 
 B)False

Question 20

When no-par common stock with a stated value is issued for cash, the common stock account is credited for an amount equal to the cash proceeds.

Accepted Answer

A) True 
 B)False

Which statement below is not a reason for a corporation to buy back its own stock.

When common stock is issued in exchange for land, the land should be recorded in the accounts at the par amount of the stock issued.

The issuance of common stock affects both paid-in capital and retained earnings.

A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of $150. If the corporation issues a 5-for-1 stock split, the market value of the stock after the split will be approximately:

Which one of the following would not be considered an advantage of the corporate form of organization?

Which of the following is not characteristic of a corporation?

In which section of the financial statements would Paid-In Capital from Sale of Treasury Stock be reported?

On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with a current market price of $73. Journalize this transaction.

Samuels, Inc. reported net income for 2011 is $105,000. During 2011 the company had 5,000 shares of $100 par, 5% preferred stock and 20,000 of $5 par common stock outstanding. Samuels' earnings per share for 2011 is

The state charter allows a corporation to issue only a certain number of shares of each class of stock. This amount of stock is called

On February 1 of the current year, Motor, Inc. issued 500 shares of $2 par common stock to an attorney in return for preparing and filing the Articles of Incorporation. The value of the services is $8,500. Journalize this transaction.

A prior period adjustment should be reported as an adjustment to the retained earnings balance at the beginning of the period in which the adjustment was made.

Merritt Company acquired a building valued at $190,000 for property tax purposes in exchange for 12,000 shares of its $5 par common stock. The stock is widely traded and selling for $15 per share. At what amount should the building be recorded by Merritt Company?

The ability of a corporation to obtain capital is

A restriction/appropriation of retained earnings establishes cash assets that are set aside for a specific purpose.

When no-par common stock with a stated value is issued for cash, the common stock account is credited for an amount equal to the cash proceeds.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 11: Corporations: Organization, Stock Transactions, and Dividends

Which statement below is not a reason for a corporation to buy back its own stock.

When common stock is issued in exchange for land, the land should be recorded in the accounts at the par amount of the stock issued.

The issuance of common stock affects both paid-in capital and retained earnings.

A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of $150. If the corporation issues a 5-for-1 stock split, the market value of the stock after the split will be approximately:

Which one of the following would not be considered an advantage of the corporate form of organization?

Which of the following is not characteristic of a corporation?

In which section of the financial statements would Paid-In Capital from Sale of Treasury Stock be reported?

On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with a current market price of $73. Journalize this transaction.

Samuels, Inc. reported net income for 2011 is $105,000. During 2011 the company had 5,000 shares of $100 par, 5% preferred stock and 20,000 of $5 par common stock outstanding. Samuels' earnings per share for 2011 is

The state charter allows a corporation to issue only a certain number of shares of each class of stock. This amount of stock is called

On February 1 of the current year, Motor, Inc. issued 500 shares of $2 par common stock to an attorney in return for preparing and filing the Articles of Incorporation. The value of the services is $8,500. Journalize this transaction.

A prior period adjustment should be reported as an adjustment to the retained earnings balance at the beginning of the period in which the adjustment was made.

Merritt Company acquired a building valued at $190,000 for property tax purposes in exchange for 12,000 shares of its $5 par common stock. The stock is widely traded and selling for $15 per share. At what amount should the building be recorded by Merritt Company?

The ability of a corporation to obtain capital is

A restriction/appropriation of retained earnings establishes cash assets that are set aside for a specific purpose.

When no-par common stock with a stated value is issued for cash, the common stock account is credited for an amount equal to the cash proceeds.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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