Question 1

A sale of treasury stock may result in a decrease in paid-in-capital.All decreases should be charged to the Paid-In-Capital from Sale of Treasury account.

Accepted Answer

A) True 
 B)False

Question 2

The par value per share of common stock represents

Accepted Answer

A)  the minimum selling price of the stock established by the articles of incorporation.
B)  the minimum amount the stockholder will receive when the corporation is liquidated
C)  an arbitrary amount established in the articles of incorporation
D)  the amount of dividends per share to be received each yearE) A) and B)
F) A) and C)

Question 3

A corporation has 10,000 shares of $100 par value stock outstanding.If the corporation issues a 5-for-1 stock split,the number of shares outstanding after the split will be 40,000.

Accepted Answer

A) True 
 B)False

Question 4

Future Sources,Inc.reported the following results for the year ending July 31,2012:
  
Prepare a retained earnings statement for the fiscal year ended July 31,2012.

Accepted Answer

The answer of Future Sources,Inc.reported the following results for the...

Question 5

The ability of a corporation to obtain capital is

Accepted Answer

A)  less than a partnership.
B)  about the same as a partnership.
C)  restricted because of the limited life of the corporation.
D)  enhanced because of limited liability and ease of share transferability.E) A) and D)
F) A) and C)

Question 6

In which section of the financial statements would Paid-In Capital from Sale of Treasury Stock be reported?

Accepted Answer

A)  other expense on income statement
B)  intangible asset on balance sheet
C)  stockholders' equity on balance sheet
D)  other income on income statementE) B) and D)
F) B) and C)

Question 7

Cash dividends are normally paid on shares of treasury stock.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements concerning taxation is accurate?

Accepted Answer

A)  Corporations pay federal income taxes but not state income taxes.
B)  Corporations pay federal and state income taxes.
C)  Only the owners must pay taxes on corporate income.
D)  Corporations pay income taxes but their owners do not.E) All of the above
F) A) and D)

Question 9

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 10

The cost method of accounting for the purchase and sale of treasury stock is a commonly used method.

Accepted Answer

A) True 
 B)False

Question 11

Marcos Company,which had 35,000 shares of common stock outstanding,declared a 4-for-1 stock split.
Required:

Accepted Answer

(1)140,000 shares (3...

Question 12

When the board of director's declares a cash or stock dividend,this action decreases retained earnings.

Accepted Answer

A) True 
 B)False

Question 13

When Bayou Corporation was formed on January 1,20xx,the corporate charter provided for 100,000 share of $10 par value common stock.The following transaction was among those engaged in by the corporation during its first month of operation: The corporation issued 9,000 shares of stock at a price of $23 per share.
The entry to record the above transaction would include a

Accepted Answer

A)  debit to Cash for $90,000
B)  credit to Common Stock for $207,000
C)  credit to Paid in Capital in Excess of Par for $117,000
D)  debit to Common Stock for $90,000E) A) and B)
F) A) and C)

Question 14

A corporation has 50,000 shares of $28 par value stock outstanding that has a current market value of $150.If the corporation issues a 4-for-1 stock split,the market value of the stock will fall to approximately

Accepted Answer

A)  $7.00
B)  $112.00
C)  $37.50
D)  $600.00E) None of the above
F) A) and B)

Question 15

The term deficit is used to refer to a debit balance in which of the following accounts of a corporation?

Accepted Answer

A)  Retained Earnings
B)  Treasury Stock
C)  Organizational Expenses
D)  Common StockE) All of the above
F) C) and D)

Question 16

What is the total stockholders' equity based on the following account balances?

Accepted Answer

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

Question 17

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 45,000 shares were originally issued and 5,000 were subsequently reacquired.What is the amount of cash dividends to be paid if a $2 per share dividend is declared?

Accepted Answer

A)  $80,000
B)  $10,000
C)  $90,000
D)  $100,000E) B) and C)
F) All of the above

Question 18

Which of the following is the appropriate general journal entry to record the declaration of a cash dividends?

Accepted Answer

A)  Retained earnings Cash
B)  Cash Dividends payable Cash
C)  Paid-in capital Cash Dividends payable
D)  Cash Dividends Cash Dividends PayableE) B) and C)
F) None of the above

Question 19

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)  $10,000E) A) and B)
F) A) and C)

Question 20

A restriction/appropriation of retained earnings

Accepted Answer

A)  decreases total assets
B)  increases total retained earnings
C)  decreases total retained earnings
D)  has no effect on total retained earningsE) A) and B)
F) All of the above

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

Marcos Company,which had 35,000 shares of common stock outstanding,declared a 4-for-1 stock split. Required:

Correct Answer
verified
(1)140,000 shares (3...
View Answer

A sale of treasury stock may result in a decrease in paid-in-capital.All decreases should be charged to the Paid-In-Capital from Sale of Treasury account.

Correct Answer
verified

A corporation has 10,000 shares of $100 par value stock outstanding.If the corporation issues a 5-for-1 stock split,the number of shares outstanding after the split will be 40,000.

Correct Answer
verified

The term deficit is used to refer to a debit balance in which of the following accounts of a corporation?

Correct Answer
verified

The ability of a corporation to obtain capital is

Correct Answer
verified

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

Correct Answer
verified

When the board of director's declares a cash or stock dividend,this action decreases retained earnings.

Correct Answer
verified

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 45,000 shares were originally issued and 5,000 were subsequently reacquired.What is the amount of cash dividends to be paid if a $2 per share dividend is declared?

Correct Answer
verified

Future Sources,Inc.reported the following results for the year ending July 31,2012: Prepare a retained earnings statement for the fiscal year ended July 31,2012.

Correct Answer
verified

What is the total stockholders' equity based on the following account balances?

Correct Answer
verified

A restriction/appropriation of retained earnings

Correct Answer
verified

A corporation has 50,000 shares of $28 par value stock outstanding that has a current market value of $150.If the corporation issues a 4-for-1 stock split,the market value of the stock will fall to approximately

Correct Answer
verified

The par value per share of common stock represents

Correct Answer
verified

Which of the following is the appropriate general journal entry to record the declaration of a cash dividends?

Correct Answer
verified

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 Answer
verified

In which section of the financial statements would Paid-In Capital from Sale of Treasury Stock be reported?

Correct Answer
verified

Cash dividends are normally paid on shares of treasury stock.

Correct Answer
verified

The cost method of accounting for the purchase and sale of treasury stock is a commonly used method.

Correct Answer
verified

Which of the following statements concerning taxation is accurate?

Correct Answer
verified

Correct Answer
verified

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

Marcos Company,which had 35,000 shares of common stock outstanding,declared a 4-for-1 stock split. Required:

Correct Answerverified(1)140,000 shares (3...View AnswerShow Answer

A sale of treasury stock may result in a decrease in paid-in-capital.All decreases should be charged to the Paid-In-Capital from Sale of Treasury account.

Correct AnswerverifiedShow Answer

A corporation has 10,000 shares of $100 par value stock outstanding.If the corporation issues a 5-for-1 stock split,the number of shares outstanding after the split will be 40,000.

Correct AnswerverifiedShow Answer

The term deficit is used to refer to a debit balance in which of the following accounts of a corporation?

Correct AnswerverifiedShow Answer

The ability of a corporation to obtain capital is

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

When the board of director's declares a cash or stock dividend,this action decreases retained earnings.

Correct AnswerverifiedShow Answer

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 45,000 shares were originally issued and 5,000 were subsequently reacquired.What is the amount of cash dividends to be paid if a $2 per share dividend is declared?

Correct AnswerverifiedShow Answer

Future Sources,Inc.reported the following results for the year ending July 31,2012: Prepare a retained earnings statement for the fiscal year ended July 31,2012.

Correct AnswerverifiedShow Answer

What is the total stockholders' equity based on the following account balances?

Correct AnswerverifiedShow Answer

A restriction/appropriation of retained earnings

Correct AnswerverifiedShow Answer

A corporation has 50,000 shares of $28 par value stock outstanding that has a current market value of $150.If the corporation issues a 4-for-1 stock split,the market value of the stock will fall to approximately

Correct AnswerverifiedShow Answer

The par value per share of common stock represents

Correct AnswerverifiedShow Answer

Which of the following is the appropriate general journal entry to record the declaration of a cash dividends?

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

In which section of the financial statements would Paid-In Capital from Sale of Treasury Stock be reported?

Correct AnswerverifiedShow Answer

Cash dividends are normally paid on shares of treasury stock.

Correct AnswerverifiedShow Answer

The cost method of accounting for the purchase and sale of treasury stock is a commonly used method.

Correct AnswerverifiedShow Answer

Which of the following statements concerning taxation is accurate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified
(1)140,000 shares (3...
View Answer

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