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Exam 20: Corporations: Formation and Capital Stock Transactions

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Question 31

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Stocks may have a(n)___________________,or stated value.

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Question 32

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A corporation has 2,000 shares of 10 percent,$50 par-value preferred stock and 20,000 shares of $5 par-value common stock outstanding.If the board of the directors decides to distribute dividends totaling $80,000,the common stockholders will receive a dividend of

A) $3.50 a share.
B) $7.50 a share.
C) $8.00 a share.
D) $10.00 a share.

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

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Question 33

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A corporation received a subscription for 1,000 shares of 10 percent,$100 par-value preferred stock at $103 a share.The entry to record this transaction consists of a debit to Subscriptions Receivable-Preferred for $103,000 and a credit to

The entry to record the issuance of 500 shares of $10 par-value common stock for $14 a share consists of a debit to Cash for $7,000 and a credit to Common Stock for

If only one class of stock is issued by a corporation,it is referred to as

Preferred Stock is shown in the Stockholders' Equity section of the balance sheet.

A corporation received a subscription for 200 shares of 10 percent,$100 par-value preferred stock at $103 a share.The entry to record this transaction consists of a debit to Subscriptions Receivable-Preferred for $20,600 and a credit to

Organization costs are carried indefinitely as an intangible asset in the records of the corporation.

If the issuing corporation retains the right to repurchase the shares of preferred stock from the stockholders at a specified price,the preferred stock is ___________________.

The Paid-in Capital in Excess of Par Value-Preferred Stock account would be shown in the

TrustOne Corporation issued 10,000 shares of no-par common stock,$3 stated value in exchange for $45,000.The entry to record the issuance includes a:

The amount paid for stock in excess of par value is called a(n)___________________.

The balance of the Preferred Stock account represents the ____________________ value of the shares issued.

One disadvantage of a corporation is

Profits in the form of ____________________ are paid to the stockholders of a corporation.

A person who signs a(n)____________________ contract agrees to purchase stock and pay for the shares at a later date.

Subscriptions Receivable is the control account for the subscribers' ledger.

A separate Common Stock account is kept in the general ledger for each common stockholder of a corporation.

When common stock is issued,the par value,or stated value,of the shares issued is recorded in the Common Stock account.

A corporation has 1,000 shares of 10 percent,$50 par-value preferred stock and 10,000 shares of $5 par-value common stock outstanding.If the board of the directors decides to distribute dividends totaling $40,000,the common stockholders will receive a dividend of