Chapter 13 & 14

Rouse Corporation's December 31, 2012 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, 20,000 shares authorized 10,000 shares issued $150,000 Common stock, $10 par value, 2,000,000 shares authorized 1,950,000 shares issued, 1,930,000 outstanding 19,000,000 Paid-in capital excess of par --- preferred stock 60,000 Paid-in capital excess of par --- common stock 27,000,000 Retained earnings 7,650,000 Treasury stock (20,000 Shares) 630,000 Rouse's total stockholders' equity was:

$53,360,000

Treasury Stock is

A corporation's own stock which has been reacquired but not retired

Carson Packaging Corporation began business in 2012 by issuing 25,000 shares of $3 par common stock for $8 per share and 10,000 shares of 6%, $10 par preferred stock for par. At the end, the common stock had a market value of $12. On its December 31, 2012 balance sheet, Carson Packaging would report

Common Stock of $75,000

A stock split:

May occur in the absence of retained earnings

On the dividend record date,

No entry is required

Win, Inc has 10,000 shares of 7%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2012. If the board of directors declares a $60,000 dividend, the:

Preferred shareholders will receive the entire $60,000

Township, Inc. has 10,000 shares of 5%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2012, and December 31, 2013. The board of directors declared and paid a $50,000 dividend in 2012. In 2013,b $110,00 of dividends are declared and paid. What are the dividends received by the preferred and common shareholders in 2013?

Preferred: $50,000 Common: $60,000

Which of the following is not true of a corporation?

The acts of its owners bind the corporation

Preferred stockholders have a priority over common stockholders as to

both dividends and assets in the event of liquidation

Dividends are predominantly paid in

cash

The effect of a stock dividend is to

change the composition of stockholders' equity

If an investment firm underwrites a stock issue, the

corporation obtains cash immediately from the investment firm.

Salon Company originally issued 3,000 shares of $10 par value common stock for $90,000 ($30 per share). Salon subsequently purchases 300 shares of treasury stock for $27 per share and resells the 300 shares of treasury stock for $29 per share. In the entry to record the sale of the treasury stock, there will be a

credit to Paid-In Capital from Treasury Stock for $600

The date on which a cash dividend becomes a binding legal obligation is on the

declaration date

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

government regulation