1. Decide whether each of the following statements is true or false. A(Click the icon to view the statements.) 2. Classic Company has two classes of common stock. Only the Class A common stockholders are entitled to vote. The company's balance sheet includes the following information: (Click the icon to view the partial balance sheet.) Read the requirements. b. of common stock. Faise False True False c. Par-value stock is worth more than no-par value stock. d. Issuing 1,000 shares of $5 par-value stock at $12 increases contributed capital by $12,000. Issuing no-par value stock with a stated value is fundamentally different from issuing par-value e. stock. A corporation issues its preferred stock in exchange for land and a building with a combined market value of $200,000. This transaction increases the corporation's stockholders' equity by $200,000 f. regardless of the assets' prior book values. g. Preferred stock is a riskier investment than common stock. True False 2. Classic Company has two classes of common stock. Only the Class A common stockholders are entitled to vote. Requirement 2a. Record the issuance of the Class A common stock for cash. Use Classic's account titles. (Record debits first, then credits. Exclude explanations from any journal entries.) Date Journal Entry Accounts Additional Paid-in Capital Debit Credit Class A Common Stock Additional Paid-in Capital Cash Class A Common Stock Class B Common Stock Retained Earnings Requirements a. Record the issuance of the Class A common stock for cash. Use Classic's account titles. b. Record the issuance of the Class B common stock for cash. Use Classic's account titles. C. How much of Classic's stockholders' equity was contributed by the stockholders? How much was provided by profitable operations? Does this division of equity suggest that the company has been successful? Why or why not? d. Write a sentence to describe what Classic's stockholders' equity means. Print Done Data table Amount Stockholders' Equity Capital stock: Class A common stock, voting, $6 par value, authorized, issued, and outstanding 1,100,000 shares Class B common stock, nonvoting, no par value, authorized, issued, and outstanding 45,100,000 shares $ 6,600,000 11,500,000 Additional paid-in capital 18,100,000 2,126,000 874,672,000 Retained earnings Total stockholders' equity 894,898,000 Print Done More info C. a. The policy-making body in a corporation is called the board of directors. b. The owner of 100 shares of preferred stock has greater voting rights than the owner of 100 shares of common stock. Par-value stock is worth more than no-par value stock. d. Issuing 1,000 shares of $5 par-value stock at $12 increases contributed capital by $12,000. Issuing no-par value stock with a stated value is fundamentally different from issuing par-value stock. f. A corporation issues its preferred stock in exchange for land and a building with a combined market value of $200,000. This transaction increases the corporation's stockholders' equity by $200,000 regardless of the assets' prior book values. e. g. Preferred stock is a riskier investment than common stock. Print Done