midterm-exam - Due Date: Sunday, July 31, 2011; 9 p.m. EDT...

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Chapter 13 1. The ability of a corporation to obtain capital is a. enhanced because of limited liability and ease of share transferability. b. less than a partnership. c. restricted because of the limited life of the corporation. d. about the same as a partnership. 2. If no-par stock is issued without a stated value, then a. the par value is automatically $1 per share. b. the entire proceeds are considered to be legal capital. c. there is no legal capital. d. the corporation is automatically in violation of its state charter. 3. Becker Company is a publicly held corporation whose $1 par value stock is actively traded at $20 per share. The company issued 2,000 shares of stock to acquire land recently advertised at $50,000. When recording this transaction, Becker Company will a. debit Land for $50,000. b. credit Common Stock for $40,000. c. debit Land for $40,000. d. credit Paid-In Capital in Excess of Par Value for $48,000. 4. Which of the following represents the largest number of common shares? a. Treasury shares b. Issued shares c. Outstanding shares d. Authorized shares 5. The acquisition of treasury stock by a corporation a. increases its total assets and total stockholders' equity. b. decreases its total assets and total stockholders' equity. c. has no effect on total assets and total stockholders' equity. d. requires that a gain or loss be recognized on the income statement. 6. 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 7. Dividends in arrears on cumulative preferred stock a. are considered to be a non-current liability. b. are considered to be a current liability. c. only occur when preferred dividends have been declared. d. should be disclosed in the notes to the ±nancial statements. 8. On January 2, 2005, Riley Corporation issued 20,000 shares of 6% cumulative preferred stock at $100 par value. On December 31, 2008, Riley Corporation declared and paid its ±rst dividend. What dividends are the preferred stockholders entitled to receive in the current year before any distribution is made to common stockholders? a. $0 b. $120,000 c. $360,000 d. $480,000 Due Date: Sunday, July 31, 2011; 9 p.m. EDT submit via WebTycho Assignment Folder 1
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Chapter 14 9. Stock dividends and stock splits have the following effects on retained earnings: Stock Splits Stock Dividends a. Increase No change b. No change Decrease c. Decrease Decrease d. No change No change 10. Which of the following statements regarding the date of a cash dividend declaration is not accu- rate? a.
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midterm-exam - Due Date: Sunday, July 31, 2011; 9 p.m. EDT...

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