Question 1

Paid-in capital may originate from real estate transactions.

Accepted Answer

A) True 
 B)False

Question 2

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 assetsE) A) and B)
F) A) and C)

Question 3

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends:   Year 1: $10,000 Year 2: 45,000 Year 3: 90,000\begin{array}{lr}	ext { Year 1: } & \$ 10,000 \	ext { Year 2: } & 45,000 \	ext { Year 3: } & 90,000\end{array} Year 1:  Year 2:  Year 3: ​$10,00045,00090,000​  
 Determine the dividends per share for preferred and common stock for the second year.

Accepted Answer

A)   $2.25 and $0.00
B)   $2.25 and $0.45
C)   $0.00 and $0.45
D)   $2.00 and $0.45 E) A) and B)
F) None of the above

Question 4

Prepare entries to record the following selected transactions completed during the current fiscal year:

Accepted Answer

The answer of Prepare entries to record the following selected...

Question 5

The excess of sales price of treasury stock over its cost should be credited to

Accepted Answer

A)   Treasury Stock Receivable
B)   Premium on Capital Stock
C)   Paid-In Capital from Sale of Treasury Stock
D)   Income from Sale of Treasury StockE) B) and D)
F) A) and D)

Question 6

One of the main disadvantages of the corporate form is the

Accepted Answer

A)   inability to raise large amounts of capital
B)   double taxation of dividends
C)   charter
D)   requirement to stockE) None of the above
F) A) and B)

Question 7

Under the cost method, when treasury stock is purchased by the corporation, the par value and the price at which the stock was originally issued are important.

Accepted Answer

A) True 
 B)False

Question 8

All of the following are normally found in a corporation's stockholders' equity section except

Accepted Answer

A)   Common Stock
B)   Excess of Issue Price Over Par
C)   Dividends in Arrears
D)   Retained EarningsE) A) and B)
F) C) and D)

Question 9

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. $\begin{array}{lr}
\text { Common Stock, } \$ 50 \text { par } & \$ 1,250,000 \
\text { Paid-In Capital in Excess of Par } & 800,000 \
\text { Paid-In Capital from Sale of Treasury Stock } & 42,000 \
\text { Retained Earnings } & 4,350,000 \
\text { Treasury Stock } & 155,000
\end{array}$

Accepted Answer

The answer of Using the following accounts and balances, prepare...

Question 10

Treasury stock that 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 changeE) None of the above
F) B) and C)

Question 11

The issuance of common stock affects both paid-in capital and retained earnings.

Accepted Answer

A) True 
 B)False

Question 12

The number of shares of outstanding stock is equal to the number of shares authorized minus the number of shares issued.

Accepted Answer

A) True 
 B)False

Question 13

The par value per share of common stock represents the

Accepted Answer

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

Question 14

Kansas 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 sold for $15 per share. At what amount should the building be recorded by Kansas Company?

Accepted Answer

A)   $60,000
B)   $180,000
C)   $210,000
D)   $120,000E) A) and C)
F) B) and C)

Exam 12: Corporations: Organization, Stock Transactions, and Dividends

Correct Answer
verified

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

Correct Answer
verified

One of the main disadvantages of the corporate form is the

Correct Answer
verified

The excess of sales price of treasury stock over its cost should be credited to

Correct Answer
verified

Under the cost method, when treasury stock is purchased by the corporation, the par value and the price at which the stock was originally issued are important.

Correct Answer
verified

The par value per share of common stock represents the

Correct Answer
verified

Correct Answer
verified

The number of shares of outstanding stock is equal to the number of shares authorized minus the number of shares issued.

Correct Answer
verified

Kansas 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 sold for $15 per share. At what amount should the building be recorded by Kansas Company?

Correct Answer
verified

All of the following are normally found in a corporation's stockholders' equity section except

Correct Answer
verified

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

Correct Answer
verified

Prepare entries to record the following selected transactions completed during the current fiscal year:

Correct Answer
verified

Paid-in capital may originate from real estate transactions.

Correct Answer
verified

The issuance of common stock affects both paid-in capital and retained earnings.

Correct Answer
verified

Exam 12: Corporations: Organization, Stock Transactions, and Dividends

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

One of the main disadvantages of the corporate form is the

Correct AnswerverifiedShow Answer

The excess of sales price of treasury stock over its cost should be credited to

Correct AnswerverifiedShow Answer

Under the cost method, when treasury stock is purchased by the corporation, the par value and the price at which the stock was originally issued are important.

Correct AnswerverifiedShow Answer

The par value per share of common stock represents the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The number of shares of outstanding stock is equal to the number of shares authorized minus the number of shares issued.

Correct AnswerverifiedShow Answer

Kansas 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 sold for $15 per share. At what amount should the building be recorded by Kansas Company?

Correct AnswerverifiedShow Answer

All of the following are normally found in a corporation's stockholders' equity section except

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Prepare entries to record the following selected transactions completed during the current fiscal year:

Correct AnswerverifiedShow Answer

Paid-in capital may originate from real estate transactions.

Correct AnswerverifiedShow Answer

The issuance of common stock affects both paid-in capital and retained earnings.

Correct AnswerverifiedShow Answer

Correct Answer
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