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Exam 18: Corporations: Organizations and Stock

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Question 31

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Journalize the transactions for the stock subscription plan for Rico Company.On February 1,Rico received subscriptions for 90 shares of $10 par value common stock at $15 per share.The buyer will pay two equal installments on March 1 and June 1.Assume all payments are made as scheduled and the company issues the stock after the June 1 collection.

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Question 32

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The journal entry for the receipt of a cash payment on common stock subscriptions would include:

A) debiting Subscriptions Receivable-Common Stock;crediting Common Stock.
B) debiting Common Stock;crediting Subscriptions Receivable-Common Stock.
C) debiting Cash;crediting Subscriptions Receivable-Common Stock.
D) debiting Cash;crediting Common Stock Subscribed.

E) C) and D)
F) A) and B)

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Question 33

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ABC sells 400 shares of its $20 par common stock for $25.The entry would entail a credit(s) of:

Voting rights are a characteristic of which type stock?

Identify the account types used in recording transactions related to a stock subscription plan: Subscriptions Receivable-Common Stock;Common Stock Subscribed,Paid-In Capital in Excess of Par Value-Common,Common Stock,Cash.Also list the financial statement where the accounts are found.

If preferred dividends are limited to the stated rate of dividend,the preferred stock is:

The death of an individual shareholder of the corporation will terminate the corporation.

Sunrise Online issued 500 shares of its $10 common stock in exchange for equipment with a fair market value of $7,500.The entry to record the transaction would include a:

The financial loss that each stockholder in a corporation can incur is unlimited.

When a company sells stock at an amount less then par value,the amount is referred to as:

What is the entry to record subscriptions received for 1,700 shares of $100 par value common stock at $130 per share?

Journalize the following stock transactions for Rick Corporation. July 22 Issued 10,000 shares of $\$ 6$ par common stock for $\$ 45,000$ cash. 28 Issued 6,000 shares of $\$ 4$ par common stock for $\$ 35,000$ cash. 31 Issued 4,000 shares of $\$ 10$ par, $7 \%$ preferred stock for $\$ 50,000$ cash.

Purchased machinery for cash. Debit ________ Credit ________

Articles of incorporation contain all of the following except:

Double taxation is said to be an advantage of a corporation.

Sold common stock at a price equal to the par value. Debit ________ Credit ________

Custer.com Company's outstanding stock is 100 shares of $100,5% cumulative nonparticipating preferred stock and 1,000 shares of $10 par value common stock.Custer paid $2,300 cash dividends including one-year dividends in arrears to preferred stockholders.Common stockholders received:

The Articles of Incorporation are submitted to the President of the United States.

The stockholders of a corporation have no mutual agency.

The TM Stockholders' Equity section includes the following: $\begin{array} { | l | r | } \hline\text { Preferred Stock } & \$ 3,800 \\\hline \text { Common Stock } & 5,950 \\\hline \text { Paid-in Capital in Excess of Par Value - Preferred } & 400 \\\hline \text { Paid-in Capital in Excess of Par Value - Common } & 1,750 \\\hline \text { Retained Earnings } & 6,000 \\\hline\end{array}$ What was the total amount common stock was sold for?