TRUE OR FALSE:

a.	The policymaking body in a corporation is called the board of directors.
b.	The owner of 100 shares of preferred stock has greater voting rights than the owner of
	100 shares of common stock.
c.	Parvalue stock is worth more than nopar stock.
d.	Issuance of 1,000 shares of $5 parvalue stock at $12 increases contributed capital by $12,000.

e.	The issuance of nopar stock with a stated value is fundamentally different from issuing
	parvalue stock.
f.	A corporation issues its preferred stock in exchange for land and a building with a combined
	market value of $200,000. This transaction increases the corporation's owners' equity by
	$200,000 regardless of the assets' prior book values.
g.	Preferred stock is a riskier investment than common stock.

2. Door Company has 2 classes of common stock. Only the class A common stockholders are entitled to vote.

Stockholders' Equity (partial balance sheet)
Capital stock:
Class A common stock, voting, $4 par value, authorized,
issued and outstanding 1,175,000 shares	$4,700,000
Class B common stock, nonvoting, no par value, authorized,
issued, and outstanding 45,600,000 shares	11,100,000
	15,800,000
Additional paidin capital	2,097,000
Retained earnings	867,233,000
Total stockholders' equity	$885,130,000

Requirement A: Record the issuance of the class A common stock for cash. Use the Door account titles (additional paid in capital, cash, class A common stock, class B common stock, retained earnings)

ACCOUNTS DEBIT CREDIT

__________ ______ _______

Requirement B: Record the issuance of the class B common stock for cash. Use the Door account titles.

ACCOUNTS DEBIT CREDIT

__________ ______ _______

Requirement C: How much of Door's stockholders' equity was contributed by the stockholders? How much was provided by profitable operations? Does this division of equity suggest that the company has been successful?

The stockholders contributed $_____ to stockholders' equity and $____ was provided by profitable operations. This division suggests that the company ____ (has, has not) been successful because most of its stockholders' equity has come from ______ (the stockholders, profitable operations).

Requirement 4: Write a sentence to describe what Door's stockholders' equity means.

Door's stockholders' equity of $____ means that the company's stockholders own $____ of the business's assets.