Question 1

A corporation, which had 18,000 shares of common stock outstanding, declared a 3-for-1 stock split.
a) What will be the number of shares outstanding after the split?
b) If the common stock had a market price of $240 per share before the stock split, what would be an approximate market price per share after the split?
c) Journalize the entry to record the stock split.

Accepted Answer

a) 54,000 shares
b) ...

Question 2

The entry to record the issuance of common stock at a price above par includes a debit to

Accepted Answer

A)   Organizational Expenses
B)   Common Stock
C)   Cash
D)   Paid­In Capital in Excess of Par-Common StockE) A) and B)
F) None of the above

Question 3

What is the total stockholders' equity based on the following account balances? Common Stock $375,000
Paid-In Capital in Excess of Par 90,000
Retained Earnings 190,000
Treasury Stock 15,000

Accepted Answer

A)   $670,000
B)   $655,000
C)   $640,000
D)   $565,000E) A) and C)
F) B) and C)

Question 4

Match each of the following stockholders' equity concepts to the most appropriate term a-h) .
-The account used to record the difference when issue price exceeds par value of stock

Accepted Answer

A)  authorized shares
B)  issued shares
C)  outstanding shares
D)  par value
E)  common stockF) preferred stockG) Paid-In Capital in Excess of ParH) transfer agentI) A) and H)
J) A) and B)

Question 5

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.E) B) and C)
F) C) and D)

Question 6

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 outstandingE) B) and C)
F) C) and D)

Question 7

Match each of the following stockholders' equity concepts to the appropriate term a-h) .
-A company whose shares can be bought and sold in public markets

Accepted Answer

A)  articles of incorporation
B)  limited liability
C)  bylaws
D)  corporation
E)  public corporationF) board of directorsG) private corporationH) dividendsI) B) and H)
J) E) and G)

Question 8

Vincent Corporation has 100,000 shares of $100 par common stock outstanding. On June 30, Vincent Corporation declared a 5% stock dividend to be issued on July 30 to stockholders of record July 15. The market price of the stock was $132 a share on June 30. Journalize the entries required on June 30, July 15, and July 30.

Accepted Answer

June 30
Stock Dividends 100,000 × 5% × $...

Question 9

Match each of the following stockholders' equity concepts to the most appropriate term a-h) .
-The maximum number of shares a company can issue to shareholders

Accepted Answer

A)  authorized shares
B)  issued shares
C)  outstanding shares
D)  par value
E)  common stockF) preferred stockG) Paid-In Capital in Excess of ParH) transfer agentI) A) and D)
J) A) and H)

Question 10

A 10% stock dividend will increase the number of shares outstanding but the book value per share will decrease.

Accepted Answer

A) True 
 B)False

Question 11

Retained Earnings represents past net income less past dividends, therefore any balance in this account would be listed on the income statement.

Accepted Answer

A) True 
 B)False

Question 12

The Sneed Corporation issues 10,000 shares of $50 par 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 Paid­In Capital in Excess of Par-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 $750,000E) All of the above
F) B) and D)

Question 13

Solar Company has 600,000 shares of $75 par common stock outstanding. On February 13, Solar declared a 3% stock dividend to be issued on April 30 to stockholders of record on March 14. The market price of the stock was $90 per share on February 13.
Journalize the entries required on February 13, March 14, and April 30.

Accepted Answer

The answer of Solar Company has 600,000 shares of $75...

Question 14

One of the prerequisites to paying a cash dividend is sufficient retained earnings.

Accepted Answer

A) True 
 B)False

Question 15

Organizational expenses are classified as intangible assets on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 16

Match the following stockholders' equity concepts to the appropriate term a-h) .
-The day of the event that creates a liability to company

Accepted Answer

A)  cash dividend
B)  date of record
C)  Stock Dividends Distributable
D)  date of declaration
E)  treasury stockF) preferred stockG) date of paymentH) Paid-In Capital in Excess of ParI) E) and F)
J) B) and G)

Question 17

Which of the following is not classified as paid-in capital on the balance sheet?

Accepted Answer

A)   common stock
B)   common stock distributable
C)   excess of issue price over par
D)   treasury stockE) A) and B)
F) None of the above

Question 18

The price at which a stock can be sold depends upon a number of factors. Which statement below is not one of those factors?

Accepted Answer

A)   the financial condition, earnings record, and dividend record of the corporation
B)   investor expectations of the corporation's earning power
C)   how high the par value is
D)   general business and economic conditions and prospectsE) A) and C)
F) A) and B)

Question 19

Match each of the following stockholders' equity concepts to the appropriate term a-h) .
-A legal entity, separate from the people who create and operate it

Accepted Answer

A)  articles of incorporation
B)  limited liability
C)  bylaws
D)  corporation
E)  public corporationF) board of directorsG) private corporationH) dividendsI) E) and G)
J) G) and H)

Question 20

A corporation is a separate entity for accounting purposes but not for legal purposes.

Accepted Answer

A) True 
 B)False

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

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

Correct Answer
verified

Correct Answer
verified
a) 54,000 shares
b) ...
View Answer

Retained Earnings represents past net income less past dividends, therefore any balance in this account would be listed on the income statement.

Correct Answer
verified

Correct Answer
verified
June 30
Stock Dividends 100,000 × 5% × $...
View Answer

Match each of the following stockholders' equity concepts to the most appropriate term a-h) . -The account used to record the difference when issue price exceeds par value of stock

Correct Answer
verified

What is the total stockholders' equity based on the following account balances? Common Stock $375,000 Paid-In Capital in Excess of Par 90,000 Retained Earnings 190,000 Treasury Stock 15,000

Correct Answer
verified

A 10% stock dividend will increase the number of shares outstanding but the book value per share will decrease.

Correct Answer
verified

Match each of the following stockholders' equity concepts to the most appropriate term a-h) . -The maximum number of shares a company can issue to shareholders

Correct Answer
verified

The price at which a stock can be sold depends upon a number of factors. Which statement below is not one of those factors?

Correct Answer
verified

Correct Answer
verified

Which of the following is not classified as paid-in capital on the balance sheet?

Correct Answer
verified

Organizational expenses are classified as intangible assets on the balance sheet.

Correct Answer
verified

One of the prerequisites to paying a cash dividend is sufficient retained earnings.

Correct Answer
verified

The Sneed Corporation issues 10,000 shares of $50 par 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

Correct Answer
verified

Match each of the following stockholders' equity concepts to the appropriate term a-h) . -A legal entity, separate from the people who create and operate it

Correct Answer
verified

Which of the following is not true of a corporation?

Correct Answer
verified

Match each of the following stockholders' equity concepts to the appropriate term a-h) . -A company whose shares can be bought and sold in public markets

Correct Answer
verified

The entry to record the issuance of common stock at a price above par includes a debit to

Correct Answer
verified

Match the following stockholders' equity concepts to the appropriate term a-h) . -The day of the event that creates a liability to company

Correct Answer
verified

A corporation is a separate entity for accounting purposes but not for legal purposes.

Correct Answer
verified

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

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

Correct AnswerverifiedShow Answer

Correct Answerverifieda) 54,000 sharesb) ...View AnswerShow Answer

Retained Earnings represents past net income less past dividends, therefore any balance in this account would be listed on the income statement.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedJune 30Stock Dividends 100,000 × 5% × $...View AnswerShow Answer

Match each of the following stockholders' equity concepts to the most appropriate term a-h) . -The account used to record the difference when issue price exceeds par value of stock

Correct AnswerverifiedShow Answer

What is the total stockholders' equity based on the following account balances? Common Stock $375,000 Paid-In Capital in Excess of Par 90,000 Retained Earnings 190,000 Treasury Stock 15,000

Correct AnswerverifiedShow Answer

A 10% stock dividend will increase the number of shares outstanding but the book value per share will decrease.

Correct AnswerverifiedShow Answer

Match each of the following stockholders' equity concepts to the most appropriate term a-h) . -The maximum number of shares a company can issue to shareholders

Correct AnswerverifiedShow Answer

The price at which a stock can be sold depends upon a number of factors. Which statement below is not one of those factors?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not classified as paid-in capital on the balance sheet?

Correct AnswerverifiedShow Answer

Organizational expenses are classified as intangible assets on the balance sheet.

Correct AnswerverifiedShow Answer

One of the prerequisites to paying a cash dividend is sufficient retained earnings.

Correct AnswerverifiedShow Answer

The Sneed Corporation issues 10,000 shares of $50 par 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

Correct AnswerverifiedShow Answer

Match each of the following stockholders' equity concepts to the appropriate term a-h) . -A legal entity, separate from the people who create and operate it

Correct AnswerverifiedShow Answer

Which of the following is not true of a corporation?

Correct AnswerverifiedShow Answer

Match each of the following stockholders' equity concepts to the appropriate term a-h) . -A company whose shares can be bought and sold in public markets

Correct AnswerverifiedShow Answer

The entry to record the issuance of common stock at a price above par includes a debit to

Correct AnswerverifiedShow Answer

Match the following stockholders' equity concepts to the appropriate term a-h) . -The day of the event that creates a liability to company

Correct AnswerverifiedShow Answer

A corporation is a separate entity for accounting purposes but not for legal purposes.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
a) 54,000 shares
b) ...
View Answer

Correct Answer
verified

Correct Answer
verified
June 30
Stock Dividends 100,000 × 5% × $...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified