Quiz chapter 10 Answers PDF

Preview

Summary

quiz chapter 10 questions and answers...

Description

Chapter 10 Quiz Answers 1. 2. 3.

At least one “class” of stock MUST have • Voting Rights Authorized capital stock are those shares • Listed in the charter The Wellington! Winery's Stockholders' Equity section includes the following! information: Preferred Stock Paid-in Capital in Excess of Par-Preferred Common Stock Paid-in Capital in Excess of Par-Common. Retained Earnings.

!$15,000 !5,000 !17,000 7,000 !9,000

What was the total selling price of the preferred! stock? • $20000 4. Earnings that a stockholder receives from a corporation is an example of which stockholder! right? • Dividends 5. Which of the following is NOT a reason for a company to purchase treasury! stock? • To buy the stock at a high price to increase the total Stockholders’ Equity 6. Sonny's Sails has declared a! $44,000 cash dividend to shareholders. The company has! 4,000 shares of $20-par, ! 6% ! preferred stock and! 10,000 shares of !$16-par common stock. The preferred stock is non-cumulative. How much will be distributed to the preferred and common stockholders on the date of! payment? • $4800 preferred, $39200 common 7. A stock dividend may be given to reduce the market price of the stock. • True 8. The portion of! Stockholders' Equity that can be used for dividends is referred to as legal capital. • False 9. The type of stock that does NOT carry paid-in capital in excess of par is! called: • No-par stock 10. The entry to record! TLR, Inc. selling! 1,200 shares of! $6 par common stock at! $10 per share would be! to: • Debit Cash $12000, credit common stock $7000, credit Paid-in capital excess of par-common stock $4800 11. HiTech Industries has a! $13,000 credit balance in Paid-In Capital-Treasury Stock. It sells! 1,000 shares of treasury! stock, which the company reacquired at! $59/share, for! $56/share. After the! transaction, what will the balance be in the Paid-In Capital in Excess of Par-Treasury !account? • $10000 credit 12. Limited liability means that the stockholders of a corporation share a personal liability for all debts of the corporation. • False

13. Maintaining their proportionate share in the ownership of a corporation when new stock is available to be purchased is an example of which stockholder! right? • Preemption 14. Ironworks, Inc. issued 400 shares of! $9 par common stock in exchange for a piece of equipment with a current market value of! $5,000. Which of the following is NOT part of the journal entry for this! transaction? • Crediting common stock for $5000 15. The formula for return on equity is net income divided by average stockholders’ equity • True 16. Evergreen! Building, Inc. has declared a! $43,000 cash dividend to shareholders. The company has! 4,500 shares of $20-par, ! 5% ! preferred stock and! 20,000 shares of $20-par ! common stock. The preferred stock is cumulative. How much will be distributed to the preferred and common stockholders on the date of payment if the preferred stock is! $12,000 in! arrears? • $16500 preferred, $26500 common 17. Stockholders' Equity consists! of • Paid-in capital and retained earnings 18. A type of stock that pays dividends in arrears is • Cumulative preferred stock 19. A journal entry for the sale of! $10 par-common stock for! $18 per share would include! a • Credit to paid-in capital in excess of par-common stock 20. A stock dividend will increase total assets • False 21. Payment of a cash dividend causes! a(n) • Decrease in assets 22. If you own! 1,200 shares! (3% of a! corporation's stock) and the corporation issues! 11,000 new! shares, how many total shares will you have after exercising your preemptive! right? • 1530 23. HiTech Industries has! 15,000 shares of treasury cost which it purchased for! $63/share. It later resold! 3,300 of those shares for! $82/share. The amount to be credited to Paid-in Capital-Treasury Stock! is: • $62700 24. For most! companies, preemptive rights are the! exception, rather than the rule • True 25. The formula to determine dividends on par-value preferred stock! is • Par value times number of outstanding shares times dividend rate 26. S&C, Inc. has! 420,000 shares of $12-par ! common stock outstanding. They have declared a! 7% stock dividend. The current market price of the common stock is! $19/share. The amount that will be credited to Paid-in Capital in Excess of Par Common Stock on the date of declaration! is: $205800...