• Home
  • Textbooks
  • Accounting Principles , Tenth Edition
  • Corporations: Organization and Capital Stock Transactions

Accounting Principles , Tenth Edition

Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

Chapter 13

Corporations: Organization and Capital Stock Transactions - all with Video Answers

Educators

Chapter Questions

Problem 1

Which of the following is not a major advantage of corporation?
a. Separate legal existence.
b. Continuous life.
c. Government regulations.
d. Transferable ownership rights

Check back soon!

Problem 2

A major disadvantage of a corporation is:
a. limited liability of stockholders.
b. additional taxes.
c. transferable ownership rights.
d. None of the above.

Check back soon!

Problem 3

Costs incurred in the formation of a corporation:
a. do not include legal fees.
b. are expensed as incurred.
c. are recorded as an asset.
d. provide future benefits whose amounts and timing are easily determined.

Check back soon!

Problem 4

Which of the following statements is false?
a. Ownership of common stock gives the owner a voting right.
b. The stockholders' equity section begins with paid-in capital,
c. The authorization of capital stock does not result in a formal accounting entry.
d. Legal capital per share applies to par value stock but not to no-par value stock.

Check back soon!

Problem 5

Total stockholders' equity (in the absence of treasury stock) equals:
a. Total paid-in capital + Retained earnings.
b. Paid-in capital + Capital stock + Retained earnings.
c. Capital stock + Additional paid-in capital - Retained carnings.
d. Common stock + Retaincd carnings.

Check back soon!
02:01

Problem 6

The account Retained Earnings is:
a. a subdivision of paid-in capital.
b. net income retained in the corporation.
c. reported as an expense in the income statement.
d. closed to capital stock.

Oluwadamilola Ameobi
Oluwadamilola Ameobi
Numerade Educator

Problem 7

A-Team Corporation issued 1,000 shares of $$\$ 5$$ par value stock for land. The stock is actively traded at $$\$ 9$$ per share. The land was advertised for sale at $$\$ 10.500$$. The land should be recorded at:
a. $$\$ 4,000$$.
c. $$\$ 9,000$$.
b. $$\$ 5.000$$.
d. $$\$ 10,500$$.

Check back soon!

Problem 8

ABC Corporation issues 1,000 shares of $$\$ 10$$ par value common stock at $$\$ 12$$ per share. In recording the transaction, credits are made to:
a. Common Stock $$\$ 10,000$$ and Paid-in Capital in Excess of Stated Value $$\$2,000$$.
b. Common Stock $$\$ 12,000$$.
c. Common $$\$ t o c k \$ 10,000$$ and Paid-in Capital in Excess of Par $$\$ 2,000$$.
d. Common Stock $$\$ 10,000$$ and Retained Earnings $$\$ 2.000$$.

Check back soon!
02:02

Problem 9

Treasury stock may be repurchased
a. to reissue the shares to officers and employees under bonus and stock compensation plans.
b. to signal to the stock market that management believes the stock is underpriced.
c. to have additional shares available for use in the acquisition of other companies.
d. More than one of the above.

Jennifer Stoner
Jennifer Stoner
Numerade Educator
02:46

Problem 10

$$\mathrm{XYZ}$$. Inc. sells 100 shares of $$\$ 5$$ par value treasury stock at $$\$ 13$$ per share. If the cost of acquiring the shares was $$\$ 10$$ per share, the entry for the sale should include credits to:
a. Treasury Stock $$\$ 1,000$$ and Paid-in Capital from Treasury Stock $$\$ 300$$.
b. Treasury Stock $$\$ 500$$ and Paid-in Capital from Treasury Stock $$\operatorname{sin0}$$.
c. Treasury Stock $$\$1,000$$ and Retained Earnings $$\$300$$.
d. Treasury Stock $$\$ \$ 00$$ and Paid-in Capital in Excess of Par $$\$800$$.

Angela Guo
Angela Guo
Numerade Educator

Problem 11

In the stockholders' equity section, the cost of treasury stock is deducted from:
a. total paid-in capital and retained camings.
b. retained earnings.
c. total stockholders' equity.
d. common stock in paid-in capital.

Check back soon!

Problem 12

Preferred stock may have priority over common stock except in:
a. dividends
b. assets in the event of liquidation.
c. cumulative dividend features.
d. voting

Check back soon!

Problem 13

Which of the following is not reported under additional paid-in capital?
a. Paid-in capital in excess of par.
b. Common stock.
c. Paid-in capital in excess of stated value.
d. Paid-in capital from treasury stock.

Check back soon!

Problem 14

M-Bot Corporation has 10,000 shares of $$8 \%, \$ 100$$ par value, cumulative preferred stock outstanding at December 31 , 2012. No dividends were declared in 2010 or 2011. If M-Bot wants to pay $$\$ 375,000$$ of dividends in 2012 , common stockholders will receive:
a. $$\$ 0$$.
c. $$\$ 215,000$$.
b. $$\$ 295,000$$.
d. $$\$ 135,000$$.

Check back soon!

Problem 15

In the stockholders' equity section of the balance sheet, common stock:
a. is listed before preferred stock.
b. is added to total capital stock.
c. is part of paid-in capital.
d. is part of additional paid-in capital.

Check back soon!