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

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Question 71

Multiple Choice

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Nebraska Inc.issues 3,000 shares of common stock for $45,000.The stock has a stated value of $10 per share.The journal entry to record the stock issuance would include a credit to Common Stock for

A) $30,000
B) $45,000
C) $15,000
D) $3,000

E) A) and B)
F) A) and D)

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Question 72

Multiple Choice

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The date on which a cash dividend becomes a binding legal obligation is the

A) declaration date
B) date of record
C) payment date
D) last day of the fiscal year

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

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Question 73

Multiple Choice

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For the current year ended, ABC had the following transactions: ​ Issued 10,000 shares of $2 par common stock for $12 per share.Issued 3,000 shares of $50 par, 6% preferred stock for $70 per share.Purchased 1,000 shares of previously issued common stock for $15 per share.Reported net income of $200,000. Declared and paid a total dividend of $40,000. ​ Assume that retained earnings had a beginning balance of $75,000. Match the following amounts to the appropriate term (a-h) . ​ -$100,000

If 100 shares of treasury stock were purchased for $50 per share and then sold at $60 per share,$1,000 of income is reported on the income statement.

On February 13,Epperson Company issued 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 shares 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.​Journalize the entries to record the February 13,September 9,and November 23 transactions.

Twenty percent of all businesses in the United States are corporations,and they account for 80% of the total business dollars generated.

Using the following information,prepare the Stockholders' equity section of the balance sheet.Seventy thousand shares of common stock are authorized and 7,000 shares have been reacquired.

Using the following accounts and balances,prepare the Stockholders' equity section of the balance sheet.Fifty thousand shares of common stock are authorized,and 5,000 shares have been reacquired.

A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8.Subsequently,the company declared a 2% stock dividend on a date when the market price was $11 per share.What is the amount transferred from the retained earnings account to paid-in capital accounts as a result of the stock dividend?

Which of the following is not a characteristic of a corporation?

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

The net increase or decrease in Retained Earnings for a period is recorded by closing entries.

Nevada Corporation has 30,000 shares of $25 par stock outstanding that has a current market value of $120.If the corporation issues a 5-for-1 stock split,the number of shares outstanding will be

Preferred stockholders must receive their current-year dividends before the common stockholders can receive any dividends.

If paid-in capital in excess of par/preferred stock is $30,000,preferred stock is $200,000,paid-in capital in excess of par/common stock is $20,000,common stock is $525,000,and retained earnings is $105,000 (deficit),total stockholders' equity is $880,000.

The amount of capital paid in by the stockholders of the corporation is called legal capital.

A corporation was organized on January 1 of the current year,with an authorization of 20,000 shares of 4%,$12 par preferred stock,and 100,000 shares of $3 par common stock.The following selected transactions were completed during the first year of operations:​ Journalize the transactions.

Match each of the following stockholders' equity concepts to the most appropriate term (a-h) . -A class of stock having first rights to dividends of a corporation

One of the main disadvantages of the corporate form is the

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