Question 1

The person responsible for maintaining the company's cash position is the

Accepted Answer

A)   controller.
B)   treasurer.
C)   vice-president.
D)   president.E) A) and B)
F) None of the above

Question 2

Cash dividends are not a liability of the corporation until they are declared by the board of directors.

Accepted Answer

A) True 
 B)False

Question 3

The officer who is generally responsible for maintaining the cash position of the corporation is the

Accepted Answer

A)   controller.
B)   treasurer.
C)   cashier.
D)   internal auditor.E) A) and C)
F) A) and B)

Question 4

Each of the following is correct regarding treasury stock except that it has been

Accepted Answer

A)   issued.
B)   fully paid for.
C)   reacquired.
D)   retired.E) C) and D)
F) B) and D)

Question 5

Jarrett Company issued 900 shares of no-par common stock for $13,200. Which of the following journal entries would be made if the stock has no stated value?

Accepted Answer

The answer of Jarrett Company issued 900 shares of no-par...

Question 6

Darling Corporation issued 200,000 shares of $20 par value, 5% preferred stock on January 1, 2016, for $4,500,000. In December 2018, Darling declared its first dividend of $800,000.
Instructions
(a) Prepare Darling's journal entry to record the issuance of the preferred stock.
(b) If the preferred stock is not cumulative, how much of the $800,000 would be paid to common stockholders?
(c) If the preferred stock is cumulative, how much of the $800,000 would be paid to common stockholders?

Accepted Answer

The answer of Darling Corporation issued 200,000 shares of $20...

Question 7

A statement of comprehensive income is presented in

Accepted Answer

A)   a single-statement format only.
B)   a two-statement format only.
C)   an operating format.
D)   either a one- or two-statement format.E) None of the above
F) A) and D)

Question 8

Dividends in arrears on cumulative preferred stock

Accepted Answer

A)   are shown in stockholders' equity of the balance sheet.
B)   must be paid before common stockholders can receive a dividend.
C)   should be recorded as a current liability until they are paid.
D)   enable the preferred stockholders to share equally in corporate earnings with the common stockholders.E) B) and C)
F) A) and B)

Question 9

Karl Corporation was organized on January 2, 2018. During 2018, Karl issued 40,000 shares at $24 per share, purchased 6,000 shares of treasury stock at $26 per share, and had net income of $600,000. What is the total amount of stockholders' equity at December 31, 2018?

Accepted Answer

A)   $1,280,000
B)   $1,404,000
C)   $1,416,000
D)   $1,440,000E) B) and C)
F) All of the above

Question 10

Lakeland, Inc. has 25,000 shares of 6%, $100 par value, noncumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2018. There were no dividends declared in 2017. The board of directors declares and pays a $250,000 dividend in 2018. What is the amount of dividends received by the common stockholders in 2018?

Accepted Answer

A)   $0
B)   $150,000
C)   $250,000
D)   $100,000E) A) and C)
F) B) and C)

Question 11

A proxy is a legal document that instructs a stockholder's agent how to vote shares of stock for the stockholder.

Accepted Answer

A) True 
 B)False

Question 12

When no-par value stock does not have a stated value, the entire proceeds from the issuance of the stock becomes legal capital.

Accepted Answer

A) True 
 B)False

Question 13

The return on common stockholders' equity is computed by dividing net income available to common stockholders by

Accepted Answer

A)   ending total stockholders' equity.
B)   ending common stockholders' equity.
C)   average total stockholders' equity.
D)   average common stockholders' equity.E) B) and C)
F) None of the above

Question 14

Which one of the following is a privately held corporation?

Accepted Answer

A)   Intel
B)   General Electric
C)   Caterpillar Inc.
D)   Cargill Inc.E) B) and C)
F) A) and D)

Question 15

The sale of common stock below par

Accepted Answer

A)   is a common occurrence in most states.
B)   is not permitted in most states.
C)   is a practice that most stockholders encourage.
D)   requires that a liability be recorded for the difference between the sales price and the par value of the shares.E) A) and B)
F) None of the above

Question 16

A stockholders' equity statement shows

Accepted Answer

A)   the names of each stockholder.
B)   how profits are distributed to the various classes of stockholders.
C)   the number of shares owned by each of the stockholders.
D)   the changes in each stockholders' equity account and in total stockholders' equity during the period.E) A) and B)
F) A) and C)

Question 17

A debit balance in the Retained Earnings account is identified as a deficit.

Accepted Answer

A) True 
 B)False

Question 18

The acquisition of treasury stock by a corporation

Accepted Answer

A)   increases its total assets and total stockholders' equity.
B)   decreases its total assets and total stockholders' equity.
C)   has no effect on total assets and total stockholders' equity.
D)   requires that a gain or loss be recognized on the income statement.E) A) and C)
F) A) and D)

Question 19

Evergreen Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000. As a result of this event,

Accepted Answer

A)   Evergreen's Common Stock account decreased $50,000.
B)   Evergreen's total stockholders' equity decreased $115,000.
C)   Evergreen's Paid-in Capital in Excess of Par account decreased $65,000.
D)   All of these answers are correct.E) None of the above
F) A) and B)

Question 20

A successful corporation can have a continuous and perpetual life.

Accepted Answer

A) True 
 B)False

Exam 11: Corporations: Organization, Stock Transactions, and Stockholders Equity

Karl Corporation was organized on January 2, 2018. During 2018, Karl issued 40,000 shares at $24 per share, purchased 6,000 shares of treasury stock at $26 per share, and had net income of $600,000. What is the total amount of stockholders' equity at December 31, 2018?

Correct Answer
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Jarrett Company issued 900 shares of no-par common stock for $13,200. Which of the following journal entries would be made if the stock has no stated value?

Correct Answer
verified

Each of the following is correct regarding treasury stock except that it has been

Correct Answer
verified

A stockholders' equity statement shows

Correct Answer
verified

When no-par value stock does not have a stated value, the entire proceeds from the issuance of the stock becomes legal capital.

Correct Answer
verified

The sale of common stock below par

Correct Answer
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A debit balance in the Retained Earnings account is identified as a deficit.

Correct Answer
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A proxy is a legal document that instructs a stockholder's agent how to vote shares of stock for the stockholder.

Correct Answer
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The officer who is generally responsible for maintaining the cash position of the corporation is the

Correct Answer
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Dividends in arrears on cumulative preferred stock

Correct Answer
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The person responsible for maintaining the company's cash position is the

Correct Answer
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A statement of comprehensive income is presented in

Correct Answer
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Correct Answer
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The acquisition of treasury stock by a corporation

Correct Answer
verified

Evergreen Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000. As a result of this event,

Correct Answer
verified

A successful corporation can have a continuous and perpetual life.

Correct Answer
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Which one of the following is a privately held corporation?

Correct Answer
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Correct Answer
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Cash dividends are not a liability of the corporation until they are declared by the board of directors.

Correct Answer
verified

The return on common stockholders' equity is computed by dividing net income available to common stockholders by

Correct Answer
verified

Exam 11: Corporations: Organization, Stock Transactions, and Stockholders Equity

Karl Corporation was organized on January 2, 2018. During 2018, Karl issued 40,000 shares at $24 per share, purchased 6,000 shares of treasury stock at $26 per share, and had net income of $600,000. What is the total amount of stockholders' equity at December 31, 2018?

Correct AnswerverifiedShow Answer

Jarrett Company issued 900 shares of no-par common stock for $13,200. Which of the following journal entries would be made if the stock has no stated value?

Correct AnswerverifiedShow Answer

Each of the following is correct regarding treasury stock except that it has been

Correct AnswerverifiedShow Answer

A stockholders' equity statement shows

Correct AnswerverifiedShow Answer

When no-par value stock does not have a stated value, the entire proceeds from the issuance of the stock becomes legal capital.

Correct AnswerverifiedShow Answer

The sale of common stock below par

Correct AnswerverifiedShow Answer

A debit balance in the Retained Earnings account is identified as a deficit.

Correct AnswerverifiedShow Answer

A proxy is a legal document that instructs a stockholder's agent how to vote shares of stock for the stockholder.

Correct AnswerverifiedShow Answer

The officer who is generally responsible for maintaining the cash position of the corporation is the

Correct AnswerverifiedShow Answer

Dividends in arrears on cumulative preferred stock

Correct AnswerverifiedShow Answer

The person responsible for maintaining the company's cash position is the

Correct AnswerverifiedShow Answer

A statement of comprehensive income is presented in

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The acquisition of treasury stock by a corporation

Correct AnswerverifiedShow Answer

Evergreen Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000. As a result of this event,

Correct AnswerverifiedShow Answer

A successful corporation can have a continuous and perpetual life.

Correct AnswerverifiedShow Answer

Which one of the following is a privately held corporation?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Cash dividends are not a liability of the corporation until they are declared by the board of directors.

Correct AnswerverifiedShow Answer

The return on common stockholders' equity is computed by dividing net income available to common stockholders by

Correct AnswerverifiedShow Answer

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