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A. Instructions: Complete each of the following statements by writing the appropriate words or amounts in the Answers column. Answers 0. Corporations whose shares of
| A. Instructions: Complete each of the following statements by writing the appropriate words or amounts in the | |||||||||
| Answers column. | |||||||||
| Answers | |||||||||
| 0. Corporations whose shares of stock are widely distributed and traded in a | |||||||||
| public market are called | public corporations | ||||||||
| 1-2. A corporation purchases 20,000 shares of its own $25 par common | |||||||||
| stock for $1,360,000, recording it at cost. Will the purchase increase, | |||||||||
| decrease, or have no effect on the following? | |||||||||
| 1. Expenses | |||||||||
| 2. Total stockholders' equity | |||||||||
| 3-5. The stock in Question 1-2 is resold for $1,400,000. Will the sale | |||||||||
| increase, decrease, or have no effect on the following? | |||||||||
| 3. Revenues | |||||||||
| 4. Total stockholders' equity | |||||||||
| 5. Total assets | |||||||||
| 6. If 90,000 shares of common stock are authorized, 65,000 shares are | |||||||||
| issued, and 9,000 shares are held as treasury stock, how many shares | |||||||||
| are outstanding. | |||||||||
| 7. Organization costs are normally classified as an ______________. | |||||||||
| 8-9. A corporation's outstanding stock is composed of 20,000 shares of $10 | |||||||||
| preferred, $100 par, and 100,000 shares of common, $50 par. Preferred | |||||||||
| dividends were passed in the prior year and no dividends have been paid | |||||||||
| thus far in the current year. A total of $200,000 in dividends is to be | |||||||||
| distributed. Determine the total amount of the dividends to be paid on the | |||||||||
| preferred stock under each of the following assumptions: | |||||||||
| 8. Preferred is noncumulative and nonparticipating | $ | ||||||||
| 9. Preferred is cumulative and nonparticipating | $ | ||||||||
| 10. The excess of issue price over par of common stock is termed a | |||||||||
| 11. The term applied to a debit balance in Retained Earnings is | |||||||||
| 12. The effect on total stockholders' equity of the declaration of a cash | |||||||||
| dividend is (increase, decrease, or no effect) | |||||||||
| 13. Three different dates related to a cash dividend declaration are (1) | |||||||||
| date of declaration, (2) date of record, and (3) date of payment. The date | |||||||||
| for recording the liability is the date of | |||||||||
| 14. A corporation with 40,000 shares of common stock issued, of which | |||||||||
| 4,000 shares are held as treasury stock, declares a cash dividend of $4 | |||||||||
| a share. The total amount of the dividend is | $ | ||||||||
| 15-17. State the net effect (increase, decrease, no effect) of the | |||||||||
| authorization and issuance of stock certificates in a stock split on each | |||||||||
| of the following: | |||||||||
| 15. Paid-in capital | |||||||||
| 16. Retained earnings | |||||||||
| 17. Number of shares outstanding | |||||||||
| 18. Are dividends in arrears on preferred stock a liability of the corporation? | |||||||||
| (Answer "yes" or "no" | |||||||||
| 19-22. State the net effect (increase, decrease, no effect) of the declaration | |||||||||
| and payment of a cash dividend on the following: | |||||||||
| 19. Paid-in capital | |||||||||
| 20. Retained earnings | |||||||||
| 21. Total stockholders' equity | |||||||||
| 22. Cash | |||||||||
| 23. The liability of the stockholders of a corporation is usually (limited, | |||||||||
| unlimited) with respect to debts owed by the corporation | |||||||||
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