E12.2 (LO 1, 2) Victoria (see E12.1) has studied the information you gave her in that exercise and has come to you with more statements about corporations. 1. Corporation management is both an advantage and a disadvantage of a corporation compared to a proprietorship or a partnership. 2. Limited liability of shareholders, government regulations, and additional taxes are the major disad- vantages of a corporation. 3. When a corporation is formed, organization costs are recorded as an asset. 4. Each ordinary share gives the shareholder the ownership rights to vote at shareholder meetings, share in corporate earnings. keep the same percentage ownership when new shares are issued, and share in assets upon liquidation. 5. The number of issued shares is always greater than or equal to the number of authorized shares. 6. A journal entry is required for the authorization of ordinary shares. 7. Publicly held corporations usually issue shares directly to investors. 8. The trading of shares on a securities exchange involves the transfer of already issued shares from an existing shareholder to another investor. 9. The market price of ordinary shares is usually the same as its par value. 10. Retained earnings is the total amount of cash and other assets paid in to the corporation by share- holders in exchange for shares. Instructions Identify each statement as true or false. If false, indicate how to correct the statement