HW Chapter9 (110-00-3261) - HOMEWORK CHAPTER 9 ACTG 500...

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HOMEWORK CHAPTER – 9 ACTG 500 MONIKA PATEL ID 110-00-3261 Solution S9-1: Corporation’s advantages: Continuous life and transferability of ownership Limited liability of the stockholders Corporation’s disadvantages: Corporate taxation Government regulation SolutionS9-2: 1. The stockholders hold ultimate power in a corporation. 2. The chairperson of the board of directors who is usually the most powerful person in a corporation whose Title is CEO. 3. The president is in charge of day-to-day operations. Whose Title is COO. 4. The chief financial officer is in charge of accounting and finance. Title is CFO. SolutionS9-3: 1. The common stockholders are the real owners of a corporation. 2. Preferred stockholders have priority over common stockholders: In receipt of dividends and In receipt of assets if the corporation liquidates. 3. Common stockholders benefit more from a successful corporation because the preferred stockholders’ dividends are limited to a specified amount. The common stockholders take more risk so their potential for gains through an increase in the company’s stock price is unlimited.
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SolutionS9-4: The $61,938,000 was paid-in capital. It was not a profit and therefore it had no effect on net income. The par value of stock has no effect on total paid-in capital. Because the Total paid-in capital is the total amount that stockholders have invested in (paid into) a corporation, including the par value of stock issued plus any additional paid-in capital. SolutionS9-5: In Millions Hewlett-Packard: Cash……………………………………………. 17,993 Common Stock……………………………. 27 Additional Paid-in Capital………………. . 17,966 Krispy Kreme Doughnuts: Cash……………………………………………. 298 Common Stock……………………………. 298 SolutionS9-6: Case A — Issue stock and buy the assets in separate
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This note was uploaded on 08/04/2011 for the course BMGT 510 taught by Professor Ddt during the Spring '11 term at Ecole Polytechnique Fédérale de Lausanne.

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HW Chapter9 (110-00-3261) - HOMEWORK CHAPTER 9 ACTG 500...

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