Question 1

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 2

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

Accepted Answer

(a)

_TB2085_00_TB2085_00 (b)
...

Question 3

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.

Question 4

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.

Question 5

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 6

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

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Cash dividends are normally paid on shares of treasury stock.

Accepted Answer

A) True 
 B)False

Question 9

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.

Question 10

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.

Question 11

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

Question 12

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

Question 13

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.

Question 14

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

Question 15

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

Question 16

Prepare entries to record the following:

Accepted Answer

(a)

_TB2085_00_TB2085_00 (b)
...

Question 17

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.

Question 18

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

Question 19

Prepare entries to record the following:

Accepted Answer

(a)

_TB2085_00_TB2085_00 (b)
...

Question 20

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

Accepted Answer

(a)

_TB2085_00_TB2085_00 (b)
...

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

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Prepare entries to record the following:

Correct Answerverified(a) _TB2085_00_TB2085_00 (b)...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Cash dividends are normally paid on shares of treasury stock.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct Answerverified(a) _TB2085_00_TB2085_00 (b)...View AnswerShow Answer

Which of the following is not true of a corporation?

Correct AnswerverifiedShow Answer

Prepare entries to record the following:

Correct Answerverified(a) _TB2085_00_TB2085_00 (b)...View AnswerShow Answer

Retained earnings

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct Answerverified(a) _TB2085_00_TB2085_00 (b)...View AnswerShow Answer

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

Correct AnswerverifiedShow 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
(a)
_TB2085_00_TB2085_00 (b)
...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
(a)
_TB2085_00_TB2085_00 (b)
...
View Answer

Correct Answer
verified

Correct Answer
verified
(a)
_TB2085_00_TB2085_00 (b)
...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
(a)
_TB2085_00_TB2085_00 (b)
...
View Answer

Correct Answer
verified