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Select those statements below that are true about cash dividends. (Check all that apply.)

On the declaration date, liabilities are increased. On the payment date, current assets are decreased.

Ima Rich purchased 100 shares of Stockits, Inc.'s $1 par value common stock from Stockits for $5 per share. Which statements are true regarding the effect of this transaction on Stockits' financial statements? (Select all that apply.)

The financing activities section of the statement of cash flows increases. Stockholders' equity on the balance sheet increases.

Wyanot Company issued 1,000 shares of its 5%, $100 par value, cumulative preferred stock for $110 cash per share. The journal entry to record this transaction includes a ______. (Check all that apply.)

$10,000 credit to Additional Paid-in Capital - Preferred $100,000 credit to Preferred Stock $110,000 debit to Cash

Just In Thyme, Inc. has the following December 31 equity balances: Common Stock of $20,000; Additional Paid-in Capital of $30,000; and Retained Earnings of $50,000. If Just In Thyme repurchases $10,000 of its stock, the total stockholders' equity balance would equal ______.

90,000

The laws governing corporations ______.

allow a company to be incorporated in a different state from the one in which it operates

When par value common stock is issued, the par value times the number of shares is credited to the account.

common , stock

Common stock's par value ______. (Check all that apply.)

has become less meaningful because states use other means to prevent stockholders from removing capital from financially distressed companies affects how common stock is recorded was introduced to prevent bankrupt companies from unfairly distributing company resources

Issuing 1,000 shares of 5%, $100 par value, cumulative preferred stock for $100 cash per share affects the accounting equation by ______. (Check all that apply.)

increasing total assets increasing total stockholders' equity

Stockit, Inc. issued 100,000 shares of the 1,000,000 shares authorized. Stockit has repurchased 10,000 of its shares. The number of shares authorized represents the ______. (Check all that apply.)

maximum number of shares Stockit is allowed to issue

A corporate charter ______. (Check all that apply.)

specifies the number of shares authorized specifies the rights and characteristics of the stock is required before stock is issued

Which of the following receive dividends if declared?

stockholders

Identify an advantage of being a publicly traded company, rather than a sole proprietorship or partnership.

Potential to raise a lot of capital

When a shareholder of Limited, Inc. sells its shares to another investor on the stock exchange, Limited, Inc.'s accounting equation ______.

is not affected because the corporation is separate from its owners

The number of shares outstanding equals the number of shares ______.

issued minus the number of shares in treasury

Contributed capital of $1,000,000 is found in the ______ section of the ______.

stockholders' equity; balance sheet

Contributed capital of $1,000,000 represents ______.

the amount stockholders have invested in exchange for stock

Corporations can raise large amounts of money because ______.

shares of stock can be purchased in small amounts, so even small investors can participate

Contributed capital is the amount in the ______.

stockholders' equity section of the balance sheet that is the amount invested by owners

capital represents the amount stockholders have invested in exchange for stock.

Contributed

Ima Rich purchased 100 shares of Stockits, Inc.'s $1 par value common stock from Stockits for $5 per share. Which statements are true regarding the effect of this transaction on Stockits' financial statements? (Select all that apply.)

Stockholders' equity on the balance sheet increases. The financing activities section of the statement of cash flows increases.

The effect on the accounting equation of declaring a dividend that will be paid at a later date includes a(n) ______. (Check all that apply.)

decrease in stockholders' equity increase in liabilities

Shares outstanding is important to financial analysts because it affects certain ratios such as the ______.

earnings per share ratio