1). 1) Market value per share is: A) An amount assigned to no-par stock. B) The right of common stockholders to protect their proportionate interests in a corporation by having the first opportunity to purchase additional shares of common stock issued by the corporation. C) Stock not assigned a value per share. D) The price at which a stock is bought and sold. E) A contractual commitment by an investor to purchase unissued shares of stock. 2) 2) The board of directors of a corporation: A) Are responsible for overseeing corporate activities. B) Do not have the power to bind the corporation to contracts, due to lack of mutual agency. C) May not also be executive officers of the corporation, due to the separate entity principle. D) Are elected by the corporate registrar. E) Are responsible for day-to-day operations of the business. 3) Sweet Company's outstanding stock consists of 1,000 shares of cumulative 5% preferred stock with a $100 par value and 10,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. 3) Dividends Declared & Paid $ 2,000 $ 6,000 $ 32,000 year 1 year 2 year 3 The amount of dividends paid to preferred and common shareholders in year 3 is: A) $32,000 preferred; $0 common. B) $15,000 preferred; $17,000 common. C) $7,000 preferred; $25,000 common. D) $5,000 preferred; $27,000 common. E) $0 preferred; $32,000 common. 4) The number of shares that a corporation's charter allows it to sell is referred to as: A) Issued stock. B) Authorized stock. C) Common stock. D) Preferred stock. E) Outstanding stock. 4) 5) A company issued 60 shares of $100 par value common stock for $7,000 cash. The journal entry to record the issuance is: A) Debit Cash $7,000; credit Paid-in Capital in Excess of Par Value, Common Stock $6,000, credit Common Stock $1,000. B) Debit Cash $7,000; credit Common Stock $6,000; credit Paid-in Capital in Excess of Par Value, Common Stock $1,000. C) Debit Investment in Common Stock $7,000; credit Cash $7,000. D) Debit Common Stock $6,000, debit Investment in Common Stock $1,000; credit Cash $7,000. E) Debit Cash $7,000; credit Common Stock $7,000. 5) 6) Preferred stock on which the right to reccive dividends is forfeited for any year that the dividends are not declared is referred to as: A) Cumulative preferred stock. B) Convertible preferred stock. C) Noncumulative preferred stock. D) Callable preferred stock. E) Participating preferred stock. 6)
