Question 1

Double taxation is a disadvantage of a corporation.

Accepted Answer

A) True 
 B)False

Question 2

Journalize the following independent transactions:
a) Casey Company sells 300 shares of $20 par-value common stock at $20.
b) Jacob Corporation sells 100 shares of $20 par-value common stock at $30.
c) Moss Inc. sells 40 shares of no-par common stock with a $20 stated value for $30 per share.

Accepted Answer

The answer of Journalize the following independent transactions:
a) Casey Company...

Question 3

Using the following accounts:
Indicate the account(s)  to be debited and credited to record the following transaction.
-Exchanged common stock for services of corporation organizers (valued at par) .
Debit ________ Credit ________

Accepted Answer

A)  Subscription receivable-common stock
B)  Cash
C)  Machinery
D)  Building
E)  LandF) Organization costsG) Preferred stockH) Common stockI) Paid in capital in excess of par value - commonJ) Paid in capital in excess of par value - preferredK) Common stock subscribedL) Discount on common stockM) Organization ExpenseN) C) and H)
O) E) and J)

Question 4

More stable earnings are a benefit of owning preferred stock.

Accepted Answer

A) True 
 B)False

Question 5

Preemptive rights allow a stockholder to:

Accepted Answer

A)   share in profits first.
B)   maintain a proportionate ownership interest in the corporation.
C)   vote their shares at the annual meeting.
D)   dispose or sell their stock without notice.E) All of the above
F) A) and B)

Question 6

When a company distributes some of their profits to shareholders, it is in the form of:

Accepted Answer

A)   cumulative stock.
B)   reduced taxes.
C)   dividends.
D)   bonds.E) A) and B)
F) A) and D)

Question 7

Almont Corporation is authorized to issue 2,000 shares of common stock. Record the journal entry for each of the following independent situations. Assume Almont issues 1,000 shares at $14 on August 31.
a) Common stock has a $11 per share par value.
b) Common stock has no par value and no stated amount.
c) Common stock is no-par stock with a stated value of $7 per share.

Accepted Answer

The answer of Almont Corporation is authorized to issue 2,000...

Question 8

List and discuss the following:
a. Rights of common stockholders
b. Rights of preferred stockholders

Accepted Answer

a. The rights of common stockholders inc...

Question 9

Preferred stock that entitles its holders to any undeclared dividends accumulated before common stockholders receive dividends is:

Accepted Answer

A)   non-participating.
B)   non-cumulative.
C)   cumulative.
D)   participating.E) All of the above
F) C) and D)

Question 10

Characteristics of a corporation include:

Accepted Answer

A)   stockholders having limited liability.
B)   direct management by the stockholders.
C)   mutual agency.
D)   Both A and C are correct.E) B) and C)
F) All of the above

Question 11

When the shares of stock are sold by the stockholder, the sale has an effect on the company's assets and liabilities.

Accepted Answer

A) True 
 B)False

Question 12

The entry to record selling 1,200 shares of no-par common stock with a stated value of $67 for $71 would be to:

Accepted Answer

A)   debit Cash $85,200; credit Common Stock $85,200.
B)   debit Cash $80,400; credit Common Stock $80,400.
C)   debit Cash $80,400; credit Common Stock $85,200; debit Paid-in Capital in Excess of Par Value-Common $4,800.
D)   debit Cash $85,200; credit Common Stock $80,400; credit Paid-in Capital in Excess of Stated Value-Common $4,800.E) A) and C)
F) A) and B)

Question 13

Washington Corporation issued 7,000 shares of its $28 par value common stock for $31 per share. The entry to record the issuance would include a:

Accepted Answer

A)   credit to Cash for $217,000.
B)   credit to Common Stock for $21,000.
C)   credit to Common Stock for $196,000.
D)   debit to Paid-in Capital in Excess of Par Value-Common for $21,000.E) A) and C)
F) B) and C)

Question 14

Eight hundred shares of $22 par common stock were exchanged for a piece of equipment with a fair market value of $18,700. The journal entry to record the transaction would include a:

Accepted Answer

A)   credit to Equipment for $17,600.
B)   debit to Common Stock for $18,700.
C)   credit to Paid-In Capital in Excess of Par Value-Common for $1,100.
D)   credit to Common Stock for $18,700.E) All of the above
F) B) and C)

Question 15

Dolly's Best issued 200 shares of its $6 common stock in exchange for used packaging equipment with a fair market value of $3,000. The entry to record the acquisition of the equipment would include a:

Accepted Answer

A)   debit to Equipment for $1,200.
B)   credit to Paid-in Capital in Excess of Par Value-Common for $1,800.
C)   credit to Common Stock for $3,000.
D)   credit to Equipment for $3,000.E) C) and D)
F) B) and D)

Question 16

Bannon Corporation has 100 shares of $47 par, 7% cumulative preferred stock and 2,900 shares of 17 par common stock. Bannon paid $19,000 in cash dividends including one-year dividends in arrears to preferred stockholders. Common stockholders will receive: (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

Accepted Answer

A)   $0.
B)   $658.
C)   $329.
D)   $18,342.E) B) and C)
F) A) and B)

Question 17

Retained earnings:

Accepted Answer

A)   are the same thing as cash.
B)   are not a part of stockholders' equity.
C)   are accumulated profits that are kept in the corporation.
D)   represent what stockholders have invested into the corporation.E) None of the above
F) A) and D)

Question 18

The journal entry for the receipt of a cash payment on common stock subscriptions would include:

Accepted Answer

A)   debiting Subscriptions Receivable-Common Stock; crediting Common Stock.
B)   debiting Common Stock; crediting Subscriptions Receivable-Common Stock.
C)   debiting Cash; crediting Subscriptions Receivable-Common Stock.
D)   debiting Cash; crediting Common Stock Subscribed.E) A) and B)
F) A) and D)

Question 19

Tory Company received the first installment of $2,400 on a common stock subscription. The entry to record the collection would include a:

Accepted Answer

A)   debit to Subscriptions Receivable-Common Stock for $2,400.
B)   credit to Common Stock Subscribed for $2,400.
C)   credit to Common Stock for $2,400.
D)   credit to Subscriptions Receivable-Common Stock for $2,400.E) A) and D)
F) A) and C)

Question 20

When Common Stock is sold at a premium:

Accepted Answer

A)   an asset increases and stockholders' equity increases.
B)   an asset increases and liabilities increase.
C)   a liability increases and stockholders' equity increases.
D)   an asset decreases and stockholders' equity decreases.E) A) and C)
F) A) and B)

Exam 18: Corporations: Organizations and Stock

Retained earnings:

Correct Answer
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List and discuss the following: a. Rights of common stockholders b. Rights of preferred stockholders

Correct Answer
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a. The rights of common stockholders inc...
View Answer

Preemptive rights allow a stockholder to:

Correct Answer
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The entry to record selling 1,200 shares of no-par common stock with a stated value of $67 for $71 would be to:

Correct Answer
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Correct Answer
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More stable earnings are a benefit of owning preferred stock.

Correct Answer
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Journalize the following independent transactions: a) Casey Company sells 300 shares of $20 par-value common stock at $20. b) Jacob Corporation sells 100 shares of $20 par-value common stock at $30. c) Moss Inc. sells 40 shares of no-par common stock with a $20 stated value for $30 per share.

Correct Answer
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When Common Stock is sold at a premium:

Correct Answer
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Eight hundred shares of $22 par common stock were exchanged for a piece of equipment with a fair market value of $18,700. The journal entry to record the transaction would include a:

Correct Answer
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Correct Answer
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Using the following accounts: Indicate the account(s) to be debited and credited to record the following transaction. -Exchanged common stock for services of corporation organizers (valued at par) . Debit Credit

Correct Answer
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Dolly's Best issued 200 shares of its $6 common stock in exchange for used packaging equipment with a fair market value of $3,000. The entry to record the acquisition of the equipment would include a:

Correct Answer
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When a company distributes some of their profits to shareholders, it is in the form of:

Correct Answer
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Washington Corporation issued 7,000 shares of its $28 par value common stock for $31 per share. The entry to record the issuance would include a:

Correct Answer
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Double taxation is a disadvantage of a corporation.

Correct Answer
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Characteristics of a corporation include:

Correct Answer
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When the shares of stock are sold by the stockholder, the sale has an effect on the company's assets and liabilities.

Correct Answer
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The journal entry for the receipt of a cash payment on common stock subscriptions would include:

Correct Answer
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Preferred stock that entitles its holders to any undeclared dividends accumulated before common stockholders receive dividends is:

Correct Answer
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Tory Company received the first installment of $2,400 on a common stock subscription. The entry to record the collection would include a:

Correct Answer
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Exam 18: Corporations: Organizations and Stock

Retained earnings:

Correct AnswerverifiedShow Answer

List and discuss the following: a. Rights of common stockholders b. Rights of preferred stockholders

Correct Answerverifieda. The rights of common stockholders inc...View AnswerShow Answer

Preemptive rights allow a stockholder to:

Correct AnswerverifiedShow Answer

The entry to record selling 1,200 shares of no-par common stock with a stated value of $67 for $71 would be to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

More stable earnings are a benefit of owning preferred stock.

Correct AnswerverifiedShow Answer

Journalize the following independent transactions: a) Casey Company sells 300 shares of $20 par-value common stock at $20. b) Jacob Corporation sells 100 shares of $20 par-value common stock at $30. c) Moss Inc. sells 40 shares of no-par common stock with a $20 stated value for $30 per share.

Correct AnswerverifiedShow Answer

When Common Stock is sold at a premium:

Correct AnswerverifiedShow Answer

Eight hundred shares of $22 par common stock were exchanged for a piece of equipment with a fair market value of $18,700. The journal entry to record the transaction would include a:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transaction. -Exchanged common stock for services of corporation organizers (valued at par) . Debit ________ Credit ________

Correct AnswerverifiedShow Answer

Dolly's Best issued 200 shares of its $6 common stock in exchange for used packaging equipment with a fair market value of $3,000. The entry to record the acquisition of the equipment would include a:

Correct AnswerverifiedShow Answer

When a company distributes some of their profits to shareholders, it is in the form of:

Correct AnswerverifiedShow Answer

Washington Corporation issued 7,000 shares of its $28 par value common stock for $31 per share. The entry to record the issuance would include a:

Correct AnswerverifiedShow Answer

Double taxation is a disadvantage of a corporation.

Correct AnswerverifiedShow Answer

Characteristics of a corporation include:

Correct AnswerverifiedShow Answer

When the shares of stock are sold by the stockholder, the sale has an effect on the company's assets and liabilities.

Correct AnswerverifiedShow Answer

The journal entry for the receipt of a cash payment on common stock subscriptions would include:

Correct AnswerverifiedShow Answer

Preferred stock that entitles its holders to any undeclared dividends accumulated before common stockholders receive dividends is:

Correct AnswerverifiedShow Answer

Tory Company received the first installment of $2,400 on a common stock subscription. The entry to record the collection would include a:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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a. The rights of common stockholders inc...
View Answer

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Correct Answer
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Correct Answer
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Using the following accounts: Indicate the account(s) to be debited and credited to record the following transaction. -Exchanged common stock for services of corporation organizers (valued at par) . Debit Credit

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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