Scribd
Upload
331 views3 pages

Chapter 11

The document contains multiple choice questions about common stock features, advantages of equity financing over debt financing, calculating outstanding shares, par value of stock, treasury stock reporting, and journal entries for dividends.

Uploaded by

amaliakb5
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
331 views3 pages

Chapter 11

The document contains multiple choice questions about common stock features, advantages of equity financing over debt financing, calculating outstanding shares, par value of stock, treasury stock reporting, and journal entries for dividends.

Uploaded by

amaliakb5
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

Chapter 11 extra exercises

Features of common stock usually include all of the following except:


voting rights.
dividends.
primary claim to the company's assets in case of liquidation.
preemptive rights.

Advantages of equity financing over debt financing include that:


dividends are mandatory.
equity financing does not require repayment.
dividends are tax deductible.
stockholders' control will increase.

Galleria Company has 280,000 shares authorized, 196,000 shares issued and 14,000 shares of
treasury stock. How many shares does Galleria Company have outstanding?
14,000
182,000
210,000
266,000

Galveston, Incorporated has 308,000 shares authorized, 140,000 shares issued, and 14,000 shares
of treasury stock. How many shares are outstanding?
126,000
434,000
154,000
406,000

Par value of a stock refers to the:


issue price of the stock.
value assigned to a share of stock in the corporate charter.
market value of the stock.
maximum selling price of the stock.

What does the par value of a stock represent?


The average market value of a stock for the year to date.
It is a legal concept not related to the market value of a stock.
The amount that would be paid if a stock was purchased by the issuing company.
The current market value of a stock.

A company issues 1 million shares of common stock with a par value of $0.14 for $16.20 a share.
The entry to record this transaction includes a debit to Cash for:
$140,000 and a credit to Common Stock for $140,000.
$16,200,000 and a credit to Common Stock for $16,200,000.
$16,200,000, a credit to Common Stock for $140,000, and a credit to Additional Paid-in Capital for
$16,060,000.
$140,000, a debit to Capital Receivable for $16,060,000, a credit to Common Stock for $140,000,
and a credit to Additional Paid-in Capital for $16,060,000.

Treasury stock:
does not appear on the balance sheet.
is a contra-equity account.
is an asset account.
is recorded as additional paid-in capital.

Treasury stock is reported in the:


financing section of the income statement.
stockholders' equity section of the balance sheet.
liability section of the balance sheet.
operating section of the income statement.

Mapleleaf Industries declared a $0.75 per share cash dividend. The company has 160,000 shares
authorized, 57,000 shares issued, and 54,000 shares of common stock outstanding. What is the
journal entry to record the dividend declaration?

Debit Dividends and credit Dividends Payable for $42,750.


Debit Dividends and credit Dividends Payable for $40,500.
Debit Dividends Payable and credit Cash for $42,750.
Debit Dividends Payable and credit Cash for $120,000.

On the payment date for a cash dividend, the company:


debits Dividends and credits Dividends Payable for the amount of the dividend.
debits Dividend Expense and credits Cash for the dividend amount.
debits Dividends Payable and credits Cash for the dividend amount.
establishes who will receive the dividend payment.
Dividends Payable is recorded as a credit on the:
declaration date.
date of record.
date of payment.
last day of the fiscal year.

Preferred stock differs from common stock in that:


preferred stock has more voting power and, as such, greater control over the management of the
company.
preferred stockholders are paid dividends before common stockholders.
preferred stock pays tax-free dividends.
preferred stock has no preemptive rights or residual claims.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy