ACCT final-quizes

CAB industries issues 20,000 shares of $.50 par common stock for $6 per share. The common stock account will increase by what amount when this transaction is recorded?

$10,000

CAB industries issues 20,000 shares of $0.50 par common stock for $6 per share. The additional paid in capital account will increase by what amount when the transaction is recorded?

$110,000

RMO declares a $50,000 cash dividend to de distributed to its common stockholders on June 1,2012. The dividend will be paid on June 15,2012. The journal entry to record the transaction on June 1 includes a:

$50,000 debit to RE

RMO declares a $50,000 cash dividend to de distributed to its common stockholders on June 1,2012. The dividend will be paid on June 15,2012. The journal entry to record the transaction on June 15 includes a:

$50,000 debit to dividends payable

K issued an additional 10,000 shares of common stock at $15 per share on dec 31,2012. Prior to issuing the shares, the company had: common stock, $10 par, 100,000 authorized shares, 75,000 shares issued and outstanding. What effect does the additional stock issue have on K's accounting equation?

Assets increase $15,000. Liabilities unaffected Equity increases $15,000

An owners legal responsible for the debt of the buisness if limited to the amount they invested in the business under which buisness organization form?

Corporation

type of business that is most likely to obtain large amounts of resources by issuing stock

Corporation

Brum issued 7,000 shares of $1 par common stock for $20 per share. The journal entry to reflect this transaction will be:

Debit cash-$140,000 Credit common stock-$7,000 Credit to additional paid in capital-$133,000

One main disadvantage of the corporate form is?

Double taxation of dividends

Authorized shares represent the:

Maximum number of shares of stock that a company can legally issue.

Sneed Corporation issues 10,000 shares of $50 par value preferred stock for cash at $70 per share. The entry to record the stock issue will consist of a debit to cash for $700,000 and a credit to _____

Preferred stock for $500,000 and additional paid in capital for $200,000

K inc had the fallowing info on its recent balance sheet: common stock, $10 par, 100,000 shares authorized, 75,000 shares issued and outstanding. K inc declares a 10% stock dividend when the market price of common stock is $30 per share. What effect does the stock dividend declaration have on K's accounting equation?

RE decreases by $225,000 .10x30=3 3x100,000=300,000 300,000-75,000=$225,000

Earnings Per Share is an indication of how much:

The company earned for each share of outstanding common stock

If a corporation declares a 2-for-1 stock split, what is true?

The number of outstanding shares is twice that number that was outstanding before the split.