FILL-IN-THE-BLANKPRINCIPLES AND TERMINOLOGY46%

INSTRUCTIONS: Complete each of the following statements by writing the appropriate words or amounts in the Answers column.

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	Answers	Scoring
0. Corporations whose shares of stock are widely distributed and traded in a public market are called ..............................................................................	public corporations	0. ____
1-2. A corporation purchases 20,000 shares of its own $25 par common stock for $1,250,000, recording it at cost. Will the purchase increase, decrease, or have no effect on the following?
1. Expenses ..........................................................................................................		1. ____
2. Total stockholders equity ...............................................................................		2. ____
3-5. The stock in Question 1-2 is resold for $1,500,000. Will the sale increase, decrease, or have no effect on the following?
3. Revenues ..........................................................................................................		3. ____
4. Total stockholders equity ...............................................................................		4. ____
5. Total assets ......................................................................................................		5. ____
6. If 90,000 shares of common stock are authorized, 75,000 shares are issued, and 5,000 shares are held as treasury stock, how many shares are outstanding? ..............................................................................................		6. ____
7. Organization costs are normally classified as a(n) .....................................		7. ____
8-9. A corporations outstanding stock is composed of 20,000 shares of $5 preferred and 100,000 shares of common, $25 par. At the end of its first year of operations, 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 and common stock.
8. Preferred ...........................................................................................................	$	8. ____
9. Common ............................................................................................................	$	9. ____
10. The excess of issue price over par of common stock is termed a ...........		10. ____
11. A debit balance in Retained Earnings is called a(n) ..................................		11. ____
12. The effect on total stockholders equity of the declaration of a cash dividend is (increase, decrease, or no effect) .............................................		12. ____
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 liability is the date of ......................................................................		13. ____
14. A corporation with 30,000 shares of common stock issued, of which 5,000 shares are held as treasury stock, declares a cash dividend of $4 a share. The total amount of the dividend is ..............................................	$	14. ____
15-18. 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 ...................................................................................................		15. ____
16. Retained earnings ...........................................................................................		16. ____
17. Number of shares outstanding ......................................................................		17. ____
18. Market price per share ....................................................................................		18. ____

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	Answers	Scoring
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 ...................................................................................................		19. ____
20. Retained earnings ...........................................................................................		20. ____
21. Total stockholders equity ...............................................................................		21. ____
22. Cash ...................................................................................................................		22. ____
23. The liability of the stockholders of a corporation is usually (limited, unlimited) with respect to debts owed by the corporation .........................		23. ____