Reference no: EM13343383
-A disadvantage of the corporate form of business entity is
a. unlimited liability for stockholders
b. corporations are subject to more governmental regulations
c. mutual agency for stockholders
d. the ease of transfer of ownership
-The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 60,000 shares were originally issued and 10,000 were subsequently reacquired. What is the number of shares outstanding?
a. 40,000
b. 70,000
c. 60,000
d. 50,000
-The Sneed Corporation issues 10,000 shares of $50 par value preferred stock for cash at $70 per share. The entry to record the transaction will consist of a debit to Cash for $700,000 and a credit or credits to
a. Preferred Stock for $700,000.
b. Paid-in Capital from Preferred Stock for $700,000.
c. Preferred Stock for $500,000 and Retained Earnings for $200,000.
d. Preferred stock for $500,000 and Paid-in Capital in Excess of Par Value-Preferred Stock for $200,000
-The date on which a cash dividend becomes a binding legal obligation is on the
a. date of record.
b. declaration date.
c. last day of the fiscal year end.
d. payment date.
-If the market rate of interest is 8%, the price of 6% bonds paying interest semiannually with a face value of $100,000 will be
a. Equal to $100,000
b. Greater than or less than $100,000, depending on the maturity date of the bonds
c. Less than $100,000
d. Greater than $100,000
-The present value of $30,000 to be received in two years, at 12% compounded annually, is (rounded to nearest dollar)
a. $37,632
b. $23,916
c. $30,000
d. $23,700
The Marx Company issued $100,000 of 12% bonds on April 1, 2010 at face value. The bonds pay interest semiannually on January 1 and July
1. The bonds are dated January 1, 2010, and mature on January 1, 2014. The total interest expense related to these bonds for the year ended December 31, 2010 is
a. $9,000
b. $1,000
c. 12,000
d. $3,000
-Any unamortized premium should be reported on the balance sheet of the issuing corporation as
a. a direct deduction from the face amount of the bonds in the liability section
b. a direct deduction from retained earnings
c. as paid-in capital
d. an addition to the face amount of the bonds in the liability section
-Ruben Company purchased $100,000 of Evans Company bonds at 100 plus $1,500 in accrued interest. The bond interest rate is 8% and interest is paid semi-annually. The journal entry to record the purchase would be:
a. Debit: Investment in Bonds $100,000; Credit: Interest Revenue $1,500 and Cash $98,500
b. Debit: Investment in Bonds $101,500; Credit: Cash $101,500
c. Debit: Investment in Bonds $100,000 and Interest Receivable $1,500; Credit: Cash $101,500
d. Investment in Bonds $100,000; Credit: Cash $100,000
-Wendell Company owns 28% of the common stock of Porter Company and accounts for the investment using the equity method. Assuming that Wendell Company purchased the stock several years ago, the balance in the investment account would be equal to the cost of the
a. investment plus the total amount of dividends Wendell has received from Porter since the investment was purchased
b. investment plus Wendell's share of Porter's net income earned since the investment was purchased
c. investment plus Wendell's share of Porter's net income earned since the investment was purchased minus the total amount of dividends Wendell has received from Porter since the investment was purchased
d. investment only
-All of the following are factors contributing to the trend for regulators to adopt accounting principles using fair value concepts except:
a. pressure on regulators to adopt an international set of accounting principles and standards.
b. the ease of applying market values to assets and liabilities.
c. hybrid measurement methods within GAAP that conflict with each other.
d. a greater percentage of total assets existing as receivables and securities.