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QUESTION 1 An important disadvantage of the corporate form of ownership is double taxation. True False...

QUESTION 1

  1. An important disadvantage of the corporate form of ownership is double taxation.

    True

    False

1 points   

QUESTION 2

  1. The liability of stockholders is normally limited to their investment in the corporation.

    True

    False

1 points   

QUESTION 3

  1. Authorized shares of common stock require a journal entry to record the information.

    True

    False

1 points   

QUESTION 4

  1. The par value of common stock is usually different from the market value of stock.

    True

    False

1 points   

QUESTION 5

  1. A characteristic of a corporation is that it is an entity that is separate and distinct from its owners.

    True

    False

1 points   

QUESTION 6

  1. Treasury stock is a contra-asset account.

    True

    False

1 points   

QUESTION 7

  1. In the event that a corporation was liquidated, preferred stockholders would be paid before common stockholders.

    True

    False

1 points   

QUESTION 8

  1. Dividends in arrears on cumulative preferred stock are a long-term liability to the company.

    True

    False

1 points   

QUESTION 9

  1. The amount per share of stock that must be retained in the business for the protection of corporate creditors is called:

    A.

    Retained Earnings
    B.

    Legal capital
    C.

    Common Stock
    D.

    Authorized shares

1 points   

QUESTION 10

  1. Organization costs should be categorized as

    A.

    intangible asset
    B.

    long-term investments.
    C.

    operating expenses.
    D.

    operating revenues

1 points   

QUESTION 11

  1. On January 2, 2007, Poi Dog Corporation issued 10,000 shares of 5% cumulative preferred stock at $100 par value. On December 31, 2007, Poi Dog Corporation declared and paid its first dividend. Compute the amount of the dividend:

    A.

    $500.
    B.

    $50,000.
    C.

    $90,000.
    D.

    $120,000.

1 points   

QUESTION 12

  1. If Vickers Company issues 1,000 shares of $2 par value common stock for $8,000, then recording the journal entry would involve:

    A.

    Common Stock will be credited for $6,000.
    B.

    Paid-In Capital in Excess of Par Value will be credited for $6,000.
    C.

    Paid-In Capital in Excess of Par Value will be credited for $8,000.
    D.

    Cash will be debited for $2,000.

1 points   

QUESTION 13

  1. Carey Company is a publicly held corporation whose $2 par value stock is actively traded at $30 per share. The company issued 5,000 shares of stock to acquire land recently advertised at $157,000. When recording this transaction, Carey Company will

    A.

    debit Land for $157,000.
    B.

    credit Common Stock for $157,000.
    C.

    debit Land for $150,000.
    D.

    debit Land for $300,000

1 points   

QUESTION 14

  1. 4000 shares of treasury stock of Meyer, Inc., previously acquired at $15 per share, are sold at $21 per share. The entry to record this transaction will include a

    A.

    credit to Treasury Stock for $84,000.
    B.

    debit to Paid-In Capital from Treasury Stock for $14,000.
    C.

    credit to Treasury Stock for $60,000.
    D.

    credit to Paid-In Capital from Treasury Stock for $60,000.

1 points   

QUESTION 15

  1. Jim Croce Corporation's stockholders' equity at December 31 consists of the following:

    Preferred stock, 8%; $50 par value; call price $55 per share; 100,000 shares authorized; 15,000 shares issued and outstanding ...........$ 750,000

    Common stock, $4 par value; 600,000 shares authorized; _???? shares issued; and ____???? shares outstanding................................$2,000,000

    Additional paid-in-capital in excess of par-Common..................................................................................................................................................$1,000,000

    Retained Earnings .............................................................................................................................................................................................................$ 500,000

    Treasury Stock (16,000shares)..........................................................................................................................................................................................$200,000

    Compute the number of common shares issued:

    A.

    200,000.
    B.

    208,000.
    C.

    500,000.
    D.

    600,000.

1 points   

QUESTION 16

  1. Jim Croce Corporation's stockholders' equity at December 31 consists of the following:

    Preferred stock, 8%; $50 par value; call price $55 per share; 100,000 shares authorized; 15,000 shares issued and outstanding ...........$ 750,000

    Common stock, $4 par value; 600,000 shares authorized; _???? shares issued; and ____???? shares outstanding................................$2,000,000

    Additional paid-in-capital in excess of par-Common..................................................................................................................................................$1,000,000

    Retained Earnings ............................................................................................................................................................................................................. $ 500,000

    Treasury Stock (16,000shares)..........................................................................................................................................................................................$200,000

    Compute the number of common shares outstanding:

    A.

    600,000.
    B.

    484,000.
    C.

    584,000.
    D.

    500,000.

1 points   

QUESTION 17

  1. Jim Croce Corporation's stockholders' equity at December 31 consists of the following:

    Preferred stock, 8%; $50 par value; call price $55 per share; 100,000 shares authorized; 15,000 shares issued and outstanding ...........$ 750,000

    Common stock, $4 par value; 600,000 shares authorized; _???? shares issued; and ____???? shares outstanding................................$2,000,000

    Additional paid-in-capital in excess of par-Common..................................................................................................................................................$1,000,000

    Retained Earnings ............................................................................................................................................................................................................. $ 500,000

    Treasury Stock (16,000shares)..........................................................................................................................................................................................$200,000

    Compute the total Paid-In -Capital:

    A.

    $3,750,000
    B.

    $4,050,000.
    C.

    $4,450,000.
    D.

    $4,250,000

1 points   

QUESTION 18

  1. Jim Croce Corporation's stockholders' equity at December 31 consists of the following:

    Preferred stock, 8%; $50 par value; call price $55 per share; 100,000 shares authorized; 15,000 shares issued and outstanding ...........$ 750,000

    Common stock, $4 par value; 600,000 shares authorized; _???? shares issued; and ____???? shares outstanding................................$2,000,000

    Additional paid-in-capital in excess of par-Common..................................................................................................................................................$1,000,000

    Retained Earnings ............................................................................................................................................................................................................. $ 500,000

    Treasury Stock (16,000shares)..........................................................................................................................................................................................$200,000

    Compute total stockholders' equity:

    A.

    $4,050,000
    B.

    $4,250,000.
    C.

    $4,450,000.
    D.

    $3,750,000

1 points   

QUESTION 19

  1. Retained earnings represents:

    A.

    cash available for dividends.
    B.

    income retained in a corporation.
    C.

    cash available for expansion and growth.
    D.

    the amount initially invested in the business by stockholders.

1 points   

QUESTION 20

  1. The formula for computing outstanding shares is:

    A.

    Authorized shares minus issued shares.
    B.

    Issued shares minus treasury shares.
    C.

    Issued shares plus treasury shares.
    D.

    Authorized shares minus treasury shares.

1 points   

QUESTION 21

  1. Dugan Corporation had net income of $300,000. To close net income would involve:

    A.

    Credit Capital $300,000
    B.

    Debit Income Summary $300,000
    C.

    Credit Income Summary $300,000
    D.

    Debit Retained Earnings $300,000

1 points   

QUESTION 22

  1. In the presentation of stockholders' equity, what information is listed last?

    A.

    Retained earnings
    B.

    Preferred Stock
    C.

    Treasury Stock
    D.

    Common Stock
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Answer #1

Ans: As per Chegg Answering Guidelines, I can only answer 4 questions.

1. TRUE: The Corporations pay taxes on its Income depending upon the type of corportion after which shareholders pay taxes on dividend received, so there is double taxation of income. Therefore, the primary disadvantage of the corporate form is the double taxation to shareholders of distributed earnings and dividends.

2. TRUE: The Corporate has the separate legal and distinct entity from its owners. It can be sued and sue in its own name. And the liability of the stockholder is limited to the amount of their investment.

3. FALSE: Authorized Share Capital defines the maximum number of shares a company is allowed to issue hence it does not require any journal entry. Issue of share capital requires journal entry.

4. TRUE: Par value is the value of shares specified at the date of incorporation whereas Market value is the actual price for a financial instrument that is worth at any given time for trading in the stock market.

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