1 point 1) Reporting procedures are the same for private and public corporations. * True O False 1 point 2) A corporation is a legal entity separate from its owners. * True O False 1 point 3) Organization costs may be paid for by giving shares to promoters of a corporation in exchange for their services in organizing the corporation. * True O False 1 point 4) Whether a business is organized as a corporation or as a proprietorship, the profit reported on the income statement will be the same. True O False 1 point 5) Corporations issue preferred shares in order to raise capital without sacrificing control of the corporation and to increase the return earned by common shareholders. * O True False 1 point 6) Accrued interest is paid on bonds that are issued between interest dates. * O True False 1 point 7) A 10% share dividend increases the number of outstanding shares. * True O False 1 point 8) The journal entry to record $10,000 in a share dividend on the declaration date can include a debit to cash dividends declared and a credit to dividends payable. True O False 1 point 9) A cash dividend does not reduce a corporation's assets or equity, while a share dividend reduces both * O True O False 10) A bond is a written promise to 1 point pay an amount identified as the par value of the bond along with interest at a stated annual rate. * True O False 1 point 11) SuperBowl Inc retired $200,000 (par value) bonds with a carrying value of $203,492. The market value of the bonds was $202,500. The corporation recognized a loss on retirement of $2,500. * O True False 1 point 12) Dividends represent the distribution of profits to the shareholders of a corporation. * True False 2 points 13) Failure to record the declaration and distribution of a share dividend would: * Cause an understatement of equity. Cause the balance sheet to be out of balance. Have no effect on total equity. Cause an overstatement of equity. Cause the outstanding shares to exceed the equity. 2 points 14) Willa Inc issued $110,000, 9%, 5-year bonds. The current market rate was 9.5%. Willa received $106,000 for the bonds. Using the effective interest method, the amount of interest expense to be recorded for the first semiannual payment was: * $5,035.00. $3,750.00 $6,500,00. $7,000.00 $3,910.60. 2 points 15) When a corporation calls in its outstanding shares and issues more than one new share in exchange for each old share, this is a: * Liquidating dividend. Share split. Share dividend. Reverse share split. O Cash dividend. 16) Common shares: * 2 points Always represent total contributed capital. Represent residual equity in a corporation. O Are usually redeemable. Make shareholders liable for acts of the corporation because they share in ownership. Allow shareholders to bind the corporation to contracts because they share in ownership 17) McJunkin Ltd. declares a 10% 2 points share dividend on December 31, 2015. Currently McJunkin has 30,000 shares outstanding. The market value of the shares on the date of declaration is $3 per share. The value to be assigned to this share dividend is: * $2,000. $8,000. $9,000. $5,000. O $6,000. 18) Bonds can be issued: * 2 points At a discount. At a premium. All of these answers are correct. O At par. Between interest payment dates. 18) Bonds can be issued: * 2 points O At a discount At a premium. O All of these answers are correct. At par. Between interest payment dates. 2 points 19) Restrictions on retained earnings can be: * Limits that identify how much of the retained earnings balance is not available for dividends or the repurchase of shares. Statutory limits set by government. Set by a corporation's directors in order to limit dividends and maintain cash. Due to loan agreements. O All of these answers are correct. 2 points 20) Dallas Sports Ltd has 100 shares of $15, noncumulative, preferred shares outstanding, and $160,000 of common shares outstanding. In the company's first year of operation, no dividends were paid, but during the second year Dallas Sports paid dividends of $24,000. The dividend should be distributed as follows: $12,000 preferred; $12,000 common. $7,000 preferred; $7,000 common. $3,000 preferred; $21,000 common. $1,400 preferred; $12,600 common. $1,500 preferred; $22,500 common. 22) The financial statement that 2 points shows the changes to a corporation's contributed capital is called: * Statement of Contributed Capital. Income Statement. Balance Sheet. Statement of Changes in Equity. None of these answers is correct. 2 points 23) An expanded income statement for a corporation with discontinued operations includes information on: Continuing operations. Discontinued operations. Net income. Earnings per share. O All of these answers are correct. 2 points 24) Pam Corporation sold 10,000 common shares at $25 per share cash. The entry to record this transaction would include: * O A credit to Cash for $250,000. A debit to Common Shares for $250,000. A credit to Common Shares for $25,000. A credit to Common Shares for $250,000. A debit to Contributed Capital for $250,000