Beruflich Dokumente
Kultur Dokumente
Nombre:_____________________________
I. TRUE-FALSE STATEMENTS
_____ 1. Preferred stockholders generally do not have the right to vote for the board of di-
rectors.
_____ 2. The market value of a corporation's stock is determined by the number of shares
that the corporation has been authorized to issue.
_____ 3. A stockholder has the right to vote in the election of the board of directors.
_____ 5. Retained earnings are subtracted from paid-in capital to arrive at total stockholders'
equity.
_____ 6. The acquisition of treasury stock by a corporation increases total assets and total
stockholders' equity.
_____ 7. A corporation is not an entity which is separate and distinct from its owners.
_____ 8. The number of common shares outstanding can never be greater than the number
of shares issued.
_____ 9. The par value of common stock must always be equal to its market value on the
date the stock is issued.
_____ 10. Book value per share of common stock is the same amount as the market value per
share.
1-2
BONOS…………..
_____ 11. A corporation can issue more shares than it is authorized in its charter, if the board
of directors approves of an increase in the number of authorized shares.
_____ 12. Book value per share is the same thing as liquidation value per share.
_____ 13. A corporation can be organized for the purpose of making a profit or it may be
nonprofit.
4. Pepe Méndez has invested $400,000 in a privately held family corporation. The corpo-
ration does not do well and must declare bankruptcy. What amount does Méndez stand
to lose?
a. Up to his total investment of $400,000.
b. Zero.
c. The $400,000 plus any personal assets the creditors demand.
d. $200,000.
6. ACCO Corporation began business in 2016 by issuing 40,000 shares of $5 par com-
mon stock for $8 per share and 10,000 shares of 6%, $10 par preferred stock for par.
At year end, the common stock had a market value of $10. On its December 31, 2016
balance sheet, ACCO would report
a. Common Stock of $400,000.
b. Common Stock of $200,000.
c. Common Stock of $320,000.
d. Paid-In Capital of $300,000.
7. Which of the following factors does not affect the initial market price of a stock?
a. The company's anticipated future earnings
b. The par value of the stock
c. The current state of the economy
d. The expected dividend rate per share
8. Retained earnings
a. is unique to the corporate form of business.
b. is an optional account in the partnership form of business.
c. reflects cash paid in by shareholders to date.
d. is closed at the end of the year.
9. Which one of the following would not be considered an advantage of the corporate
form of organization?
a. Limited liability of owners
b. Separate legal existence
c. Continuous life
d. Government regulation
10. ACCO Company has 2,000 shares of 5%, $100 par non-cumulative preferred stock
outstanding at December 31, 2016. No dividends have been paid on this stock for 2015
or 2016. Dividends in arrears at December 31, 2016 total
a. $0.
b. $1,000.
c. $10,000.
d. $20,000.
1-4
11. Which of the following is not a right or preference associated with preferred stock?
a. The right to vote
b. First claim to dividends
c. Preference to corporate assets in case of liquidation
d. To receive dividends in arrears before common stockholders receive dividends
III. EXCERSICES
Ex. 1
The following selected transactions pertain to ACCO Corporation:
Jan. 3 Issued 150,000 shares, $10 par value, common stock for $22 per share.
Feb. 10 Issued 8,000 shares, $10 par value, common stock in exchange for special purpose
equipment. ACCO Corporation's common stock has been actively traded on the
stock exchange at $25 per share.
Instructions
Journalize the transactions.
Ex. 2
On January 1, 2016, Puerto Rico Company issued 30,000 shares of $2 par value common
stock for $150,000. On March 1, 2016, the company purchased 4,000 shares of its common
stock for $8 per share for the treasury. On June 1, 2016, 1,000 of the treasury shares are sold
for $10 per share. On September 1, 2016, 2,000 treasury shares are sold at $6 per share.
Instructions
Journalize the stock transactions of Puerto Rico Company in 2016.