ACC 201 Ch11

Blink, Inc. has 1,000 shares of $10 par, 5% preferred stock, and 20,000 shares of $10 par common stock issued and outstanding. If the board of directors authorizes a $20,000 dividend, the payment to common shareholders will total $____

19500

Zinc, Inc. has 10,000 shares of $5 par, 5% preferred stock, and 5,000 shares of $10 par common stock issued and outstanding. If the board of directors authorizes a $15,000 dividend, the payments to preferred shareholders will total _________.

2,500

A small stock dividend is a distribution of _____% or less of previously outstanding shares.

25

John Kim agrees to contribute equipment with a fair market value of $5,000 in exchange for 100 shares of Rio Inc.'s common stock with a par value of $1 per share. Rio will record this transaction as a credit to which of the following accounts? (Check all that apply.)

Common Stock Paid-in Capital in Excess of Par Value

Vanya Inc.'s charter authorizes 1,000 shares of stock at a stated value of $1 per share. Vanya sells 50 shares of stock at its initial offering for $10 per share. The journal entry to record this transaction will include which of the following entries? (Check all that apply.)

Credit to Common Stock for $50. Credit to Paid-In Capital, in Excess of Stated Value for $450. Debit to Cash for $500.

Gomez Inc.'s charter authorizes 1,000 shares of stock at a par value of $1 per share. Gomez sells 200 shares of stock at its initial offering for $1 per share. The journal entry to record this transaction will include which of the following entries? (Check all that apply.)

Debit to Cash for $200. Credit to Common Stock, $1 par for $200.

Identify the advantages of the corporate form of business. (Check all that apply.)

Ease of capital accumulation Limited liability Continuous life

Identify the disadvantages of the corporate form of business. (Check all that apply.)

Government regulation Corporate taxation

Identify which of the following is not generally a right of common stockholders.

Manage operations

Jose Garcia agrees to contribute land with a fair market value of $10,000 in exchange for 200 shares of Damian Inc.'s common stock with a par value of $10 per share. The journal entry to record this transaction in the books of Damian, Inc., will include a credit to _________ in the amount of _______.

Paid-in Capital, in Excess of Par; $8,000

Which of the following is not a reason that a corporation would issue preferred stock?

To obtain a tax advantage over corporations with no preferred stock

_____________ is a general term that refers to any shares issued to obtain capital (owner financing).

capital

A _________ is the distribution of cash to its owners. This is determined by the board of directors.

cash dividend

Darby, Inc. has 25,000 shares of stock issued and outstanding. All the shares of stock have the same rights and characteristics; therefore, the stock is called _____ stock

common

When all authorized shares of stock have the same rights and characteristics, the stock is called _______ stock.

common

A statement of stockholders' equity lists balances of: (Check all that apply).

common stock shares cash dividends net income retained earnings

A ___________ is an entity created by law that is separate from its owners. Owners are called stockholders or shareholders. These entities can be privately or publicly held.

corporation

Bing Inc.'s charter authorizes 500 shares of stock with no par value. Bing Inc. sells 100 shares of stock at its initial offering for $5 per share. The journal entry to record this transaction will include a (debit/credit) _______ to Common Stock for ______.

credit 500

On May 25, Tyler, Inc. issues 100 shares of $10 par value preferred stock for $5,000 cash. The entry to record this transaction would include a (debit/credit) ________ to the preferred stock account in the amount of _______.

credit, 1,000

Niren, Inc.'s charter authorizes 1,000,000 shares of stock at a par value of $1 per share. Niren sells 100 shares of stock at its initial offering for $1 per share. The journal entry to record this transaction will include a (debit/credit) ____ to Common Stock, $1 par for _____

credit, 100

On August 20, Max, Inc. issues 100 shares of $1 par value preferred stock for $3,000 cash. The entry to record this transaction would include a (debit/credit) ____ to the preferred stock account in the amount of ____

credit, 100

Josie Inc.'s charter authorizes 1,000 shares of stock with no par value. Josie Inc. sells 100 shares of stock at its initial offering for $5 per share. The journal entry to record this transaction will include a (debit/credit) ____ to Common Stock, for ____

credit, 500

Ivers, Inc. purchased 100 shares of its own $10 par value common stock for $20 per share. The journal entry to record this transaction would include which of the following entries?

debit to treasury stock, credit to cash

The board of directors authorizes a cash _____ or distribution of cash to its investors.

dividends

The amount of income earned per each share of a company's outstanding common stock is known as:

earnings per share

True or false: Preferred stock can be issued to raise money with voting rights.

false

The ______ value per share is the price at which a stock is bought and sold.

market

The market value per share is the price at which stock is bought and sold. Which of the following factors does not influence market value?

par value

_________ has/have special rights that give it priority over other types of stock in one or more areas.

preferred

Corporations can be separated into two types. A _____ held corporation does not offer its stock for public sale and usually has few stockholders. A _____ held corporation offers its stock for public sale and can have thousands of stockholders.

privately, publicly

A charter application usually must be signed by the prospective stockholders called incorporators or _____. Then, it is filed with the appropriate state official.

promoters

The account that consists of a company's cumulative net income less any losses and dividends declared since its inception is called _________.

retained earnings

The _____ lists the beginning and ending balances of key equity accounts and describes the changes that occur during the period.

statement of stockholders equity

Capital _____ is a general term that refers to any shares issued to obtain capital (owner financing).

stock

Stockholders have the right to _____ at stockholders' meetings.

stock

The board of directors of Visor, Inc. authorize a _________, a distribution of additional shares of the corporation's own stock, to existing shareholders.

stock dividend

Two of the biggest disadvantages of the corporate form of business are government regulation and corporate _____

taxation

A corporation is created by obtaining a charter from:

the state government

Keys, Inc. purchased 100 shares of its own common stock for $10 per share. The stock is now classified as ______ stock, a contra equity account, reported on the statement of stockholder's equity.

treasury

When a corporation purchases shares of its own stock, it is called ________ stock.

treasury

True or false: Stockholders do not have the power to bind the corporation to contracts. This is referred to as lack of mutual agency.

true

In the computation of basic earnings per share, a company will use the _____.

weighted-average common shares outstanding