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Exam 20: Corporations: Formation and Capital Stock Transactions

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Question 41

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The---------- accounts for all stock issued by a corporation and receives all cancelled and newly issued stock certificates from the transfer agent.

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Question 42

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The Ventura Corporation, a new corporation, took over the assets and liabilities of the Jeremy Ruggers Company on January 2, 2019. The assets and liabilities assumed, after appropriate revaluation by Ruggers Company, are shown below. The Ventura Corporation is authorized to issue 100,000 shares of $10 par-value common stock and 50,000 shares of 12 percent, $50 par-value preferred stock. Jan. 2 The corporation issued 3,000 shares of common stock and 300 shares of preferred stock at par to Ruggers for his equity in the sole proprietorship business and the corporation took over Ruggers' assets and liabilities. 2 Issued 2,500 shares of common stock to Shaundra Ferris at par value for cash. 2 Issued 800 shares of common stock and 200 shares preferred stock to Celina Delgado at par value for cash. Required: 1. Record the transactions on page 1 of a general journal. Omit descriptions. 2. Prepare the opening balance sheet for the corporation on January 2, 2019 3. If Ventura Corporation paid $900 for legal fees, charter fee, and cost of engraving stock certificates, how would this transaction be recorded?

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Question 43

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The outstanding stock of Adam Baum Company is composed of 25,000 shares of $100 par, 2%, cumulative preferred stock and 200,000 shares of $5 par common stock. Dividends have not been paid for the current year or the previous year. If $180,000 is to be distributed as dividends for the current year, what total amount will be distributed to the common stockholders?

A corporation received a subscription for 1,000 shares of 10 percent, $100 par-value preferred stock at $103 a share. The entry to record this transaction consists of a debit to Subscriptions Receivable-Preferred for $103,000 and a credit to:

The transfer of stock between shareholders is:

Stock is issued to investors at the time they sign the stock subscription contract.

A corporation has 1,000 shares of 12 percent, $60 par-value preferred stock and 20,000 shares of $2 par-value common stock outstanding. If the board of the directors declares dividends totaling $50,000, the common stockholders will receive a dividend of:

A corporation received a subscription for 200 shares of 10 percent, $100 par-value preferred stock at $103 a share. The entry to record this transaction consists of a debit to Subscriptions Receivable -Preferred for $20,600 and a credit to:

The "preemptive right" enables shareholders to purchase additional shares to maintain their percentage ownership should the corporation issue additional common shares in the future.

Participating preferred stockholders:

State laws prohibit the issuance of stock at less than par or stated value.

When common stock is issued, the par value, or stated value, of the shares issued is recorded in the Common Stock account.

The Odegard Corporation has outstanding 80,000 shares of 5%, $100 par-value, noncumulative, nonparticipating preferred stock and 160,000 shares of $2 par-value common stock, sold at an average price of $20 per share. There were no dividends in arrears. The board of directors voted to distribute $240,000 as dividends in 2019, $410,000 in 2020, and $520,000 in 2021. Compute the following: 1. Total dividend paid to preferred stockholders in 2019. 2. Total dividend paid to common stockholders in 2019. 3. Total dividend paid to preferred stockholders in 2020. 4. Total dividend paid to common stockholders in 2020. 5. Total dividend paid to preferred stockholders in 2021. 6. Total dividend paid to common stockholders in 2021.

Profit distribution to stockholders is called-------- .

Common stockholders will receive a dividend:

A separate Common Stock account is kept in the general ledger for each common stockholder of a corporation.

If the issuing corporation retains the right to repurchase the shares of preferred stock from the stockholders at a specified price, the preferred stock is--------- .

The Northwest Corporation has outstanding 20,000 shares of 12%, $50 par-value, noncumulative, nonparticipating preferred stock and 100,000 authorized common shares of which 80,000 shares of $10 par-value common stock are outstanding. The board of directors voted to distribute $60,000 as dividends in 2019, $140,000 in 2020, and $200,000 in 2021. Compute the following: 1. Amount paid on each share of preferred stock in 2019. 2. Amount paid on each share of common stock in 2019. 3. Amount paid on each share of preferred stock in 2020. 4. Amount paid on each share of common stock in 2020. 5. Amount paid on each share of preferred stock in 2021. 6. Amount paid on each share of common stock in 2021.

A corporation has 10,000 shares of 6 percent, $50 par-value noncumulative preferred stock and 50,000 shares of $4 par-value common stock outstanding. Last year, no dividends were paid. This year, the board of directors decided to pay a dividend of $80,000. The common stockholders will receive a dividend of:

No-par-value stock can be sold at any price while par value stock cannot be sold for less than its par value.