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Exam 13: Corporations: Organization and Capital Stock Transactions

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Question 51

Multiple Choice

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Victory Corporation sold 400 shares of treasury stock for $45 per share. The cost for the shares was $35. The entry to record the sale will include a

A) credit to Gain on Sale of Treasury Stock for $14000.
B) credit to Paid-in Capital from Treasury Stock for $4000.
C) debit to Paid-in Capital in Excess of Par for $4000.
D) credit to Treasury Stock for $18000.

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Question 52

Multiple Choice

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Each of the following is reported for common stock except the

A) par value.
B) shares issued.
C) shares outstanding.
D) liquidation value.

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Question 53

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Retained earnings are a part of stockholders' equity.

Anastasia Corporation began business by issuing 600000 shares of $5 par value common stock for $24 per share. During its first year the corporation sustained a net loss of $60000. The year-end balance sheet would show

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

A major difference between IFRS and GAAP relates to the

On July 6 Crevasse Corporation issued 2000 shares of its $1.50 par common stock. The market price of the stock on that date was $18 per share. Journalize the issuance of the stock.

A corporation whose stock is regularly traded on a national securities exchange is a

Treasury stock is

Nina Corporation's December 31 2017 balance sheet showed the following: 8% preferred stock $20 par value cumulative 40000 shares $\begin{array}{lr}\text {authorized; 20,000 shares issued}& \$ 400,000 \\\text {Common stock, \$ 10 parvalue, 4,000,000 shares authorized;}&\\\text {\( 1,950,000 \) shares issued, \(3,860,000 \) shares outstanding}&39,000,000\\\text { Paid-in capital in excess of par-preferred stock } & 120,000 \\\text { Paid-in capital in excess of par-common stock } & 54,000,000 \\\text { Retained earnings } & 15,300,000 \\\text { Treasury stock (40,000 shares) } & 1,260,000\end{array}$ Nina's total paid-in capital was

Identify (by letter) each of the following characteristics as being an advantage a disadvantage or not applicable to the corporate form of business organization.

When stock is issued for legal costs incurred in forming a corporation the transaction is recorded by debiting Organization Expense for the

The term residual claim refers to a stockholders' right to

Which one of the following would not be considered an advantage of the corporate form of organization?

Dividends in arrears on cumulative preferred stock

Orley Company had the following transactions. 1. Issued 5000 shares of common stock with a stated value of $10 for $130000. 2. Issued 2000 shares of $100 par preferred stock at $108 for cash. Instructions Prepare the journal entries to record the above stock transactions.

Place each of the items listed below in the appropriate subdivision of the stockholders' equity section of a balance sheet.

Andy Eggers has invested $150000 in a privately held family corporation. The corporation does not do well and must declare bankruptcy. What amount does Eggers stand to lose?

Legal capital per share cannot be equal to the

Under the cost method Treasury Stock is debited at the price paid to reacquire the shares and the same amount is credited to Treasury Stock when the shares are sold.