Term
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Definition
| The amount of stock that a corporation is authorized to sell as indicated in its charter |
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| The internal rules and procedures for conducting the affairs of a corporation. |
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Definition
| A document that creates a corporation. |
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| A business organized as a legal entity separate and distinct from its owners under state corporation |
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| A feature of preferred stock entitling the stockholder to receive current and unpaid prior-year dividends before common stockholders receive dividends. |
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Term
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Definition
| stock Capital stock that has not been assigned a value in the corporate charter. |
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| Costs incurred in the formation of a corporation. |
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Term
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Definition
| Capital stock that has been issued and is being held by stockholders. |
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| capital Total amount of cash and other assets paid in to the corporation by stockholders in exchange for capital stock. |
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Definition
| Capital stock that has been assigned a value per share in the corporate charter |
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Term
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Definition
| Capital stock that has some preferences over common stock. |
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Term
| Privately held corporation |
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Definition
| A corporation that has only a few stockholders and whose stock is not available for sale to the general public. |
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| Publicly held corporation |
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Definition
| A corporation that may have thousands of stockholders and whose stock is regularly traded on a national securities exchange. |
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Term
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Definition
| Net income that is retained in the corporation for future use. |
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Term
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Definition
| The amount per share assigned by the board of directors to no-par stock. |
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Term
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Definition
| A corporation's own stock that has been issued and subsequently reacquired from shareholders by the corporation but not retired. |
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| Kunkel Corporation reports net income of $450,000. Prepare the entry to close net income. |
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Definition
Dec. 31 Income summary 450000
Retained earnings 450000 |
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Term
| On May 10, Mazili Corporation issues 2,000 shares of $10 par value common stock for cash at $18 per share |
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Definition
May 10
Cash 36000
Common Stock 20000
Paid-in cap. in excess of par 16000 |
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| On June 1, Mendoza Inc. issues 3,000 shares of no-par common stock at a cash price of $6 per share. Journalize the issuance of the shares assuming the stock has a stated value of $1 per share |
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Definition
June 1
Cash 18000
PIC in excess of stated value 5000
Common Stock 3000 |
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| Kane Inc.'s $10 par value common stock is actively traded at a market value of $15 per share. Kane issues 5,000 shares to purchase land advertised for sale at $85,000. Journalize the issuance of the stock in acquiring the land. |
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Definition
(remeber we do not use the adveritsing rate we use the most determineable amount)
Land 75000
Common Stock 50000
PIC. in excess of par value 25000 |
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Term
| On July 1, Goetz Corporation purchases 500 shares of its $5 par value common stock for the treasury at a cash price of $8 per share. On September 1, it sells 300 shares of the treasury stock for cash at $11 per share. Journalize the two treasury stock transactions. |
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Definition
July 1
Treasury stock 4000
Cash 4000
Sept. 1
Cash 3300
Treasury stock 2400
PIC. from treasury stock 900 |
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Term
Mar. 2 Issued 5,000 shares of $5 par value common stock to attorneys in payment of a bill for $30,000 for services provided in helping the company to incorporate.
June 12 Issued 60,000 shares of $5 par value common stock for cash of $375,000.
July 11 Issued 1,000 shares of $100 par value preferred stock for cash at $110 per share.
Nov. 28 Purchased 2,000 shares of treasury stock for $80,000. |
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Definition
Mar. 2
Organization expense 30000
Common stock 25000
PIC in excess par value - Comm. stock 5000
June 12
Cash 375000
Common stock 300000
PIC excess par Comm.stock 75000
July 11
Cash 110000
Preferred stock 100000
PIC excess par Pref. stock 10000
Nov. 28
Treasury stock 80000
Cash 8000 |
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Term
T or F
A corporation can issue more shares than it is authorized in its charter, if the board of directors approves of an increase in the number of authorized shares. |
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Definition
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Term
T or F
As soon as a corporation is authorized to issue stock, an accounting journal entry should be made recording the total value of the shares authorized. |
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Definition
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Term
T or F
Organizational costs are capitalized by debiting an intangible asset entitled Organization Costs. |
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Definition
Flase
They are expensed though Organizational Costs Expense account. Not an Asset. |
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Term
T or F
Treasury stock should not be classified as a current asset. |
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Definition
True
Tresury is a contra equity account. |
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Term
T or F
The term “Capital surplus” can be used instead of “Additional Paid-in Capital”. |
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Definition
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Term
T or F
The cost of a noncash asset acquired in exchange for common stock should be either the fair market value of the consideration given up or the consideration received, whichever is more clearly determinable. |
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
| The controller is the Chief Accounting Officer and has 3 responsibilities |
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Definition
1. Mantaining the accounting records.
2. Maintianing an adaquate internal controls
3. preparing the finacial reports and taxes |
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Term
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Definition
1. the corporate funds
2. responsible for maintaining the company cash position. |
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Term
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Definition
1. prescribe the issuing stock
2. the distribution of earnings permitted to stockholders
3. the effects of retiring stock. |
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Term
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Definition
| Govern the sale of capital stockto the general public. |
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Term
| Corporation forming process |
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Definition
1. application to the secrtary of the stae.
2. after app aproval it is granted a chater
3. develops by-laws |
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Term
| TREASURY STOCK_a corporation's own stock that it has issued and subsequently reacquired from shareholders, but not retired. A corporation may acquire treasury stock for various reasons: |
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Definition
1. To reissue the shares to officers and employees under bonus and stock compensation plans.
2. To signal to the stock market that management believes the stock is underpriced, in the hope of enhancing its market value.
3. To have additional shares available for use in the acquisition of other companies.
4. To reduce the number of shares outstanding and thereby increase earnings per share.
5. To rid the company of disgruntled investors, perhaps to avoid a takeover, as illustrated in the Ford Motor Company Feature Story. |
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Term
| When Tresury stock is sold for less then it was purchased and thier is no more in Paid-in excess of Tresury stock account the defiency is debit to |
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Definition
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Term
| The difference between common stock issued (1200) and outstanding (1000) is equal to |
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Definition
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Term
| Paid in Capital is sometimes called |
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Definition
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Term
Tresury Stock is located after__________
and is ( deducted) |
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Definition
Retained earnings 610,000
Total paid-in capital and retained earnings 2,387,000
Less: Treasury stock—common (50,000) |
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Term
| Book Value=the equity a common stock holders has in the net assets of owning one share of stock |
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Definition
| Total Stockholders equity divided by number of common stock shares OUTSTANDING |
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Term
| Andrews, Inc. paid $45,000 to buy back 9,000 shares of its $1 par value common stock. This stock was sold later at a selling price of $6 per share. The entry to record the sale includes a |
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Definition
credit to Paid-in Capital from Treasury Stock for $9,000. <----------
credit to Retained Earnings for $9,000.
debit to Paid-in Capital from Treasury Stock for $45,000.
debit to Retained Earnings for $45,000. |
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Term
| Andrews, Inc. paid $45,000 to buy back 9,000 shares of its $1 par value common stock. This stock was sold later at a selling price of $6 per share. The entry to record the sale includes a |
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Definition
credit to Paid-in Capital from Treasury Stock for $9,000. <----------
credit to Retained Earnings for $9,000.
debit to Paid-in Capital from Treasury Stock for $45,000.
debit to Retained Earnings for $45,000. |
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Term
| Dailey Company is a publicly held corporation whose $1 par value stock is actively traded at $22 per share. The company issued 2,000 shares of stock to acquire land recently advertised at $55,000. When recording this transaction, Dailey Company will |
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Definition
A. debit Land for $55,000.
B. credit Common Stock for $44,000.
C. debit Land for $44,000.<------
D. credit Paid-In Capital in Excess of Par Value for $53,000. |
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Term
| A corporation purchases 30,000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders’ equity? |
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Definition
Increase by $1,050,000
Decrease by $600,000
Decrease by $1,050,000 <------
Increase by $600,000 |
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Term
| Dividends are declared out of |
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Definition
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Term
| Elton Manufacturing Corporation purchased 4,000 shares of its own previously issued $10 par common stock for $92,000. As a result of this event, |
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Definition
A. Elton’s Common Stock account decreased $40,000.
B. Elton’s total stockholders’ equity decreased $92,000. <----
C. Elton’s Paid-in Capital in Excess of Par Value account decreased $52,000.
D. All of the above. |
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Term
| If no-par stock is issued without a stated value, then |
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Definition
| the entire proceeds are considered to be legal capital. |
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Term
| In published annual reports |
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Definition
A. subdivisions within the stockholders’ equity section are routinely reported in detail.
B. capital surplus is used in place of retained earnings.
C. the individual sources of additional paid-in capital are often combined. <----------
D. retained earnings is often not shown separately. |
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Term
| Legal capital per share cannot be equal to the |
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Definition
| total proceeds from the sale of par value stock above par value. |
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Term
| Rebel Inc. issued 3,000 shares of no-par common stock with a stated value of $3 per share. The market price of the stock on the date of issuance was $12 per share. The entry to record this transaction includes a |
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Definition
A. debit to Cash for $9,000.
B. credit to Common Stock for $36,000.
C. credit to Common Stock for $9,000. <--------
D. debit to Paid-in Capital in Excess of Par Value for $36,000. |
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Term
| Under the corporate form of business organization |
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Definition
| the corporation's life is stipulated in its charter. |
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Term
| The ability of a corporation to obtain capital is |
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Definition
| enhanced because of limited liability and ease of share transferability. |
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Term
| The purchase of treasury stock |
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Definition
| decreases common stock outstanding. |
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Term
| When stock is issued for legal services, the transaction is recorded by debiting Organization Expense for the |
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Definition
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Term
| Slaton Company originally issued 3,000 shares of $10 par value common stock for $90,000 ($30 per share). Slaton subsequently purchases 300 shares of treasury stock for $27 per share and resells the 300 shares of treasury stock for $29 per share. In the entry to record the sale of the treasury stock, there will be a |
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Definition
credit to Common Stock for $8,100.
credit to Treasury Stock for $3,000.
debit to Paid-In Capital in Excess of Par Value of $9,000.
credit to Paid-In Capital from Treasury Stock for $600. <------- |
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