TRUE or FALSE
47. Fair market value is the estimated amount that a willing seller would receive from a financially capable buyer for the sale or exchange of the asset in a free market. 48. An advantage of the corporate form is the ability of the board to hire professional managers to attend to the corporation's affairs. 49. In the event of corporate liquidation, shareholders whose stock is preferred as to assets are entitled to receive the par value of their shares before any amounts are distributed to creditors or ordinary shareholders. 50. The concept of legal capital exists to protect the corporation's assets for the shareholders of the corporation. 51. The cost of treasury stock is deducted from total share capital and retained earnings in determining total shareholders' equity. 52. In case of no-par shares, legal capital is the total consideration received by the corporation for the issuance of its shares to the shareholders but this would necessarily exclude the excess of issue price over the stated value. 53. The Corporation Code prohibits the original issue of share capital for a consideration less than the par or stated value. 54. The par value of a share of share capital is an indication of the book value of the share of stock. 55. The highest bidder in a delinquency sale is the person willing to pay the "offer price" that includes the full amount of the subscription balance plus accrued interest, cost of advertisement and expenses of auction sale in exchange for the highest number of shares. 56. The board of directors carries out the day-to-day operations of the business 57. The par value of share constitutes the legal capital of a corporation 58. The reissuance of treasury stocks at a price above cost results in a gain to be reported in the statement of recognized income and expense. 59. Shareholders elect the board of directors which appoints the management of a corporation n re or ge Chapter 6: Share Capital I 6 29 47. Fair market value is the estimated amount that a willing seller would receive from a financially capable buyer for the sale or exchange of the asset in a free market. 48. An advantage of the corporate form is the ability of the board to hire professional managers to attend to the corporation's affairs. 49. In the event of corporate liquidation, shareholders whose stock is preferred as to assets are entitled to receive the par value of their shares before any amounts are distributed to creditors or ordinary shareholders. 50. The concept of legal capital exists to protect the corporation's assets for the shareholders of the corporation. 51. The cost of treasury stock is deducted from total share capital and retained earnings in determining total shareholders' equity. 52. In case of no-par shares, legal capital is the total consideration received by the corporation for the issuance of its shares to the shareholders but this would necessarily exclude the excess of issue price over the stated value. 53. The Corporation Code prohibits the original issue of share capital for a consideration less than the par or stated value. 54. The par value of a share of share capital is an indication of the book value of the share of stock. 55. The highest bidder in a delinquency sale is the person willing to pay the "offer price" that includes the full amount of the subscription balance plus accrued interest, cost of advertisement and expenses of auction sale in exchange for the highest number of shares. 56. The board of directors carries out the day-to-day operations of the business 57. The par value of share constitutes the legal capital of a corporation 58. The reissuance of treasury stocks at a price above cost results in a gain to be reported in the statement of recognized income and expense. 59. Shareholders elect the board of directors which appoints the management of a corporation n re or ge Chapter 6: Share Capital I 6 29
