ch11[1] - 1.

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1.   When Bayou Corporation was formed on January 1, 20xx, the corporate charter provided for 100,000 share of  $10 par value common stock.  The following transaction was among those engaged in by the corporation during  its first month of operation: The corporation issued 9,000 shares of stock at a price of $23.00 per share.   The entry to record the above transaction would include a    Student Response Value Correct Answer Feedback 1.  debit to Common  Stock for $90,000      2. credit to Common  Stock for $207,000      3. credit to Paid in  Capital in Excess of  Par- for $117,000      4. debit to Cash for  $90,000 0%       Score: 0/1    2.   A corporation has 60,000 shares of $25 par value stock outstanding that has a current market value of $120.  If  the corporation issues a 5-for-1 stock split, the number of shares outstanding will be:    Score: 0/1   
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3.   Nexis Corp. issues 1,000 shares of $15 par value common stock at $25 per share.  When the transaction is  recorded, credits are made to:    Score: 1/1    4.   A restriction/appropriation of retained earnings     Score: 1/1    5.   If paid-in-capital in excess of par/preferred stock is $30,000, preferred stock is $200,000, paid-in-capital in  excess of par/common stock is $20,000, common stock is $525,000, and retained earnings is $105,000  (deficit), the total stockholders' equity is $880,000. 
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  Score: 1/1    6.   The two main sources of stockholders' equity are investments contributed by stockholders and net income  retained in the business.    Score: 0/1    7.   Preferred stockholders must receive their current year dividends before the common stockholders can receive  any dividends.    Score: 0/1    8.
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  A 10% stock dividend will increase the number of shares outstanding but the book value per share will  decrease.    Score: 1/1    9.   By-laws are part of the business's charter or articles of incorporation.    Score: 0/1    10.   One of the main  disadvantages  of the corporate form is the    Score: 1/1 
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  11.   The issuance of common stock affects both Paid-In Capital and Retained Earnings.   Score: 1/1    12.   The authorized stock of a corporation    Score: 1/1    13.   If the board of directors authorizes a $100,000 restriction of retained earnings for a future plant expansion, the  effect of this action is to  
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  Score: 1/1    14.  
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ch11[1] - 1.

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