Question
16. What does the concept of double taxation mean as far as corporations are concerned? a. Corporations have to file two forms. b. The corporation
16. What does the concept of double taxation mean as far as corporations are concerned?
a. Corporations have to file two forms.
b. The corporation has to pay taxes on its income and the shareholder has to pay taxes on dividends received.
c. The corporate tax rate is twice the individual rate.
d. None of the above
17. What type of stock in a corporation is considered debt rather than equity?
a. Type B Common Stock
b. convertible preferred stock
c. Preferred shares redeemable at shareholder option
d. None of the above
18. The par value of common shares:
a. It is an arbitrary figure established by the corporation
b. It is a measure of the market value of stocks.
c. It is established by GAAP
d. It is established by the Securities and Exchange Commission.
19. When common shares are issued to purchase land, the land will be recorded in the books for an amount that represents:
a. The par value of the shares issued
b. The value of the land on the seller's books
c. The market value of the shares issued
d. "b" or "c", at management's choice
20. Costs incurred to issue common shares:
a. They are recorded as an expense
b. They are amortized to expense over a period of five years.
c. They are presented in an Equity account with a debit balance
d. They are subtracted from the Paid-in capital when the issuance of the shares is accounted for.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started