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Question 8Question text(T / F) Income available to common stockholders is net income plus any dividends on preferred stock.Select one:True False
FeedbackCorrect. Income available to common stockholders is net income less any dividends on preferred stock.The correct answer is 'False'.Question 9Question text(T / F) The retained earnings balance of a corporation is part of its paid-in capital.Question 10Question text(T / F) The purchase of treasury stock does not affect stockholders' equity.The correct answer is 'False'.Flag questionQuestion textWhich of the following is not an advantage of the corporate form of organization?
FeedbackThe correct answer is: Double taxation.Question 2CorrectMark 10.00 out of 10.00Question textAn arbitrary amount assigned by the board of directors to each share of a given class of no-par stock is:Select one:a. Stated value. Correct. Stated value is an arbitrary amount assigned by the board of directors to each share of capital stock without a par value.b. Liquidation value. c. Redemption value. d. Quasi-par value. FeedbackThe correct answer is: Stated value.Question 3Question textPreferred stock that has dividends in arrears is:Select one:a. Noncumulative and callable preferred stock. b. Cumulative preferred stock. Correct. Dividends in arrears are cumulative unpaid dividends. Only cumulative preferred stock has dividends in arrears.c. Noncumulative preferred stock. d. Noncumulative and convertible preferred stock. FeedbackThe correct answer is: Cumulative preferred stock.Question 4Question text
Quinn Corporation issued 10,000 shares of $20 par value common stock at $50 per share. The amount thatwould be credited to Paid-In Capital in Excess of Par Value—Common is:Select one:a. $700,000. b. $500,000. c. $200,000. d. None of these. e. $300,000. Correct. The amount credited to the Paid-In Capital in Excess of Par Value—Common is computed as follows: 10,000 shares times($50−$20)=$300,000.FeedbackThe correct answer is: $300,000.Question 5Question textYou are given the following information: Capital Stock, $80,000 ($80 par); Paid-In Capital in Excess of Par Value—Common, $200,000; and Retained Earnings, $400,000. Assuming only one class of stock, the book value per share is:Select one:a. None of the above. b. $280. c. $400. d. $680. Correct. The book value of common stock is computed as follows: Total book value of stockholders'equity ($80,000 + $200,000 + $400,000) = $680,000; Total shares ÷1,000 Book value per share $ 680e. $80. FeedbackThe correct answer is: $680.Question 6Question textThe advantages of incorporation include: (Mark all that apply)Select one or more:a. Minimal accounting requirements.
b. Limited liability. c. Separation of owners and entity. d. Continuous existence of the entity. e. Very few government regulations to follow. f. Double Taxation. g. Easy transfer of ownership.