Question:

Victoria has prepared the following list of statements about corporations.

Instructions: Identify each statement as true or false. If false, indicate how to correct the statement.

Tutor instructions: please review my answers and correct them if wrong. Then please add the statement to the false items to indicate how to correct the statement.

1. A corporation is an entity separate and distinct from its owners.
2. As a legal entity, a corporation has most of the rights and privileges of a person
3.Most of the largest U.S. corporations are privately held corporations.
4.Corporations may buy, own, and sell property; borrow money; enter into legally binding contracts; and sue and be sued.
5. The net income of a corporation is not taxed as a separate entity
6.Creditors have a legal claim on the personal assets of the owners of a corporation if the corporation does not pay its debts
7.The transfer of stock from one owner to another requires the approval of either the corporation or other stockholders
8.The board of directors of a corporation legally owns the corporation
9. The chief accounting officer of a corporation is the controller
10. Corporations are subject to fewer state and federal regulations than partnerships or proprietorship.

Question:

Hayslett Corporation was organized on January 1, 2008. It is authorized to issue 20,000 shares of 6%, $40 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $1per share. The following stock transactions were completed during the first year.

Jan. 10 Issued 80,000 shares of common stock for cash at $3 per share.

Mar. 1 Issued 10,000 shares of preferred stock for cash at $45 per share.

Apr. 1 Issued 25,000 shares of common stock for land. The asking price of the land was $90,000. The company's estimate of the fair market value of the land was $75,000.

May 1 Issued 75,000 shares of common stock for cash at $4 per share.

Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill for $44,000 for services provided in helping the company organize.

Sept. 1 Issued 5,000 shares of common stock for cash at $6 per share.

Nov. 1 Issued 2,000 shares of preferred stock for cash at $48 per share.

a) Journalize the transactions.

b) post to the stockholder s equity accounts.( use J1 as the posting reference )

c) Prepare the paid in capital section of stockholder s equity at December 31,2008.

Question:

On October 31, the stockholders' equity section of Omar Company consists of common stock $300,000 and retained earnings $900,000. Omar is considering the following two courses of action: (1) declaring a 5% stock dividend on the 50,000, $6 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $3 per share. The current market price is $13 per share.

Complete the tabular summary of the effects of the alternative actions on the components of stockholders' equity and outstanding shares.and per value per share,use the following column headings: before action,after stock dividend and after stock split.