26. The net effect to a corporation of the declaration and payment of a cash dividend is to a. decrease assets and decrease stockholders' equity b. decrease liabilities and decrease stockholders' equity c. increase stockholders' equity and decrease liabilities d. increase assets and increase stockholders' equity

____ 27. Which of the following accounts below is reported in the paid-in capital/stockholders' equity section of the corporate balance sheet? a. Cash b. Stock Dividends c. Organizational Expenses d. Preferred Stock

____ 28. The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 50,000 shares were originally issued and 5,000 were subsequently reacquired. What is the amount of cash dividends to be paid if a $1 per share dividend is declared? a. $50,000 b. $5,000 c. $100,000 d. $45,000

____ 29. The outstanding stock is composed of 10,000 shares of $100 par, cumulative preferred $8 stock, and 50,000 shares of no-par common stock. Preferred dividends have been paid every year except for the preceding year and the current year. If $380,000 is to be distributed as a dividend for the current year, what total amount will be distributed to the common stockholders? a. $380,000 b. $220,000 c. $80,000 d. $160,000

____ 30. The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 40,000 shares were originally issued and 5,000 were subsequently reacquired. What is the number of shares outstanding? a. 5,000 b. 35,000 c. 45,000 d. 55,000

____ 31. A corporation issues 2,000 shares of common stock for $ 32,000. The stock has a stated value of $10 per share. The journal entry to record the stock issuance would include a credit to Common Stock for a. $20,000 b. $32,000 c. $12,000 d. $2,000

____ 32. X, Y, and Z are partners, sharing income 1:2:3. After selling all of the assets for cash, dividing losses on realization, and paying liabilities, the balances in the capital accounts are as follows: X, $50,000 Credit.; Y, $40,000 Debit.; and Z, $30,000 Credit. How much cash is available for distribution to the partners? a. $120,000 b. $30,000 c. $40,000 d. $90,000

____ 33. Jimmy, Jerry, and Johnny decide to liquidate their partnership. All assets are sold and the liabilities are paid. Following these transactions, the capital balances and profit and loss percentages are as follows: Jimmy, $27,000 and 30%; Jerry, $(12,000) and 40%; Johnny, $43,000 and 30%. Jerry is unable to contribute any assets to reduce the deficit. How much cash will Jimmy receive as a result of the partnership liquidation? a. $27,000 b. $21,000 c. $23,400 d. $15,000

____ 34. An advantage of the partnership form of business organization is a. unlimited liability b. mutual agency c. ease of formation d. limited life

____ 35. Which of the following is not a right possessed by common stockholders of a corporation? a. the right to vote in the election of the board of directors b. the right to receive a minimum amount of dividends c. the right to sell their stock to anyone they choose d. the right to share in assets upon liquidation

____ 36. Merl and Fern share income equally. During the current year the partnership net income was $40,000. Merl made withdrawals of $12,000 and Fern made withdrawals of $17,000. At the beginning of the year, the capital account balances were: Merl capital, $42,000; Fern capital, $58,000. Merl's capital account balance at the end of the year is a. $76,500 b. $64,500 c. $62,000 d. $50,000 ____ 37. The remaining cash of a partnership (after creditors have been paid) upon liquidation is divided among partners according to their a. capital balances b. contribution of assets c. drawing balances d. income sharing ratio

____ 38. A ratio of 3:2:1 is the same as a. 30%:20%:10% b. 1/2:1/3:1/6 c. 3/10:2/10:1/20 d. both (a) and (c)

____ 39. When a new partner is admitted to a partnership, there should be a(n) a. revaluation of assets b. spin-off of assets c. allocation of assets d. return of assets

____ 40. The characteristic of a partnership that gives the authority to any partner to legally bind the partnership and all other partners to business contracts is called a. unlimited liability b. ease of formation c. mutual agency d. dissolution

____ 41. Madi pays Quincy $39,000 for her 30% interest in a partnership with total net assets of $120,000. Following this transaction, Madi's capital account should have a credit balance of a. $36,000 b. $39,000 c. $33,000 d. more than $39,000

____ 42. How is treasury stock shown on the balance sheet? a. as an asset b. as a decrease in stockholders' equity c. as an increase in stockholders' equity d. treasury stock is not shown on the balance sheet

____ 43. The liability for a dividend is recorded on which of the following dates? a. the date of record b. the date of payment c. the date of announcement d. the date of declaration _

___ 44. A corporation purchased 1,000 shares of its own $5 par common stock at $10 and subsequently sold 500 of the shares at $20. What is the amount of income realized from the sale? a. $0 b. $5,000 c. $2,500 d. $10,000

____ 45. A partner withdraws from a partnership by selling her interest to another person who currently is not associated with the firm. As a result of this transaction, the capital account balance of the other partners in the partnership a. will increase b. will decrease c. will remain the same d. may increase, decrease, or remain the same

____ 46. What is the total stockholders' equity based on the following account balances? Common Stock $400,000 Paid-In Capital in Excess of Par 40,000 Retained Earnings 190,000 Treasury Stock 20,000 a. $640,000 b. $630,000 c. $610,000 d. $650,000

____ 47. X and Y have original investments of $50,000 and $100,000 respectively in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%, salary allowances of $27,000 and $18,000 respectively, and the remainder equally. How much of the net income of $90,000 is allocated to X? a. $60,000 b. $43,000 c. $45,000 d. $47,000

____ 48. The entry to record the issuance of common stock at a price above par includes a debit to a. Organizational Expenses b. Common Stock c. Cash d. Paid-In Capital in Excess of Par-Common Stock

____ 49. A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8. Subsequently, the company declared a 2% stock dividend on a date when the market price was $11 a share. What is the amount transferred from the retained earnings account to paid-in capital accounts as a result of the stock dividend? a. $3,200 b. $6,400 c. $4,800 d. $8,800

____ 50. A partnership liquidation occurs when a. a new partner is admitted b. a partner dies c. the ownership interest of one partner is sold to a new partner d. the assets are sold, liabilities paid, and business operations terminated