ACCT FINAL APS

Carlton Company does not ring up sales taxes separately on the cash register. Total receipts for February amounted to $126,000. If the sales tax rate is 5%, what amount must be remitted to the state for February's sales taxes? Select answer from the options below

126,000 / 1.05 = $120,000. $120,000 x 0.05 = $6,000.

A ________ does not require a formal journal entry on a corporation's books.

2-for-1 stock split

In what way is a corporation different from a sole proprietorship or partnership? Select answer from the options below

A corporation is subject to more federal and state government regulations.

Acer Corporation recently distributed stock dividends. What is a likely reason for this decision?

Acer Corporation wishes to appease common stockholders, and sufficient cash is not available to pay cash dividends.

Foremost Manufacturing wants to buy $50,000 of sheet metal from Ore Industries on credit. Before agreeing to the sale, Ore decides to evaluate Foremost's financial status. Of the following potential findings, which would lead Ore to refuse to sell the metal on credit?

Foremost's current assets are $450,000 and its current liabilities are $475,000.

DeHaven Enterprises has 12,000 shares authorized and issued of 9%, $75 par preferred stock. What is net income during a year when beginning common stockholders' equity is $4,218,000 and ending common stockholders' equity is $4,597,000 if the return on common stockholders' equity is 14%? Select answer from the options below

In this scenario, the preferred dividends are $81,000 (12,000 x $75 x 9%). The average common stockholders' equity is $4,407,500 (($4,218,000+4,597,000)/2). Multiplying the average common stockholders' equity of $4,407,500 by 14% equals $617,050. Adding the preferred dividends to this amount gives a net income of $698,050.

Patsy owns more stock in Aqua Marine Supplies than any other stockholder owns. Loretta is designated as an agent for Aqua Marine Supplies. How do the two compare?

Only Loretta may purchase inventory for Aqua Marine Supplies.

Why would a company have a physical headquarters in one state but file for incorporation in another state?

States vary in the laws that govern corporations. Therefore, companies generally incorporate in a state whose laws are favorable to the corporate form of business.

Determine total stockholders' equity given the following information:Common Stock, $5 par (500,000 shares authorized, 450,000 shares issued, and 425,000 shares outstanding)Additional Paid-in Capital - Common Stock $1,125,000Treasury Stock (at cost): $125,000Retained Earnings: $1,948,000 Select answer from the options below

Stockholders' equity is the remaining amount of assets available to the shareholders after all liabilities have been paid. Treasury stock is considered a liability. Therefore, to solve for stockholders' equity you would use the following formula: Stockholders' Equity = Par Value of Issued Shares (450,000 X $5= $2,250,000) + Additional Paid-in Capital ($1,125,000) + Retained Earnings ($1,948,000) - Treasury Stock ($125,000) = $5,198,000.

Boring Corporation has one class of $2 par common stock. The company has authorized 600,000 shares, issued 500,000 shares, and currently has 480,000 shares outstanding. Additional paid-in capital totals $2,500,000. What amount will Boring report as total paid-in capital? Select answer from the options below

Total paid-in capital consists of the par value of stock issued plus any additional paid in capital. Boring will report $3,500,000 total paid-in capital ((500,000 x $2) + $2,500,000).

two classifications appearing in the paid-in capital section of the balance sheet are capital stock and

additional paid-in capital.

If the market rate of interest at the date of issuance of a bond is greater than the stated interest rate, this indicates that the Select answer from the options below

bonds were issued at a discount.

In exchange for ________, preferred stockholders often relinquish

dividend preference; voting rights.

Both stock splits and stock dividends ________ total stockholders' equity, while only ________ result in a decrease in the par value of common stock. Select answer from the options below

maintain; stock splits

In addition to cash, the issuance of common stock affects Select answer from the options below

only the paid-in capital accounts.

If common stock is issued for an amount greater than par value, the amount above the par value is credited to Select answer from the options below

paid-in capital in excess of par value.