Question :
25. The ability of a corporation to obtain capital is: A. less than : 1224812
25. The ability of a corporation to obtain capital is: A. less than a partnership.B. about the same as a partnership.C. restricted because of the limited life of the corporation.D. enhanced because of the limited liability and the ease of share transferability.
26. Which of the following statements is true with regard to equity capital? A. The number of shares actually in the hands of stockholders are called outstanding shares.B. It is unusual for corporations to have more than one class of stock outstanding at any point in time.C. Preferred stock represents the shares of stock that have been permanently retired.D. Issued shares represent the maximum number of shares that can be issued by a corporation.
27. Authorized shares represent the: A. number of previously issued shares that have been repurchased by the corporation.B. number of shares that the corporation has sold.C. number of shares that are currently held by stockholders.D. maximum number of shares of stock that a company can legally issue.
28. Issued shares represent the: A. number of previously issued shares that have been repurchased by the corporation.B. number of shares that the corporation has distributed to owners to date.C. number of shares that are currently held by stockholders.D. maximum number of shares that can be sold by the corporation.
29. Outstanding shares represent the: A. number of previously issued shares that have been repurchased by the corporation.B. number of shares that the corporation has sold.C. number of shares that are currently held by stockholders.D. maximum number of shares that can be sold by the corporation.
30. Par value represents the: A. arbitrary amount that establishes a minimum price for the stock when it is first issued.B. current market price of the stock.C. amount for which any treasury shares have been acquired by the corporation.D. amount for which treasury shares may be reissued.
31. Ebberle Corporation reported the following in the stockholders’ equity section of its balance sheet at December 31, 2012:
Common stock, $1 par value
$10,000
Paid-in capital in excess of par-common stock
40,000
Total capital stock
$50,000
Retained earnings
25,000
Less: Treasury stock (at cost, $20 per share)
2,000
Total stockholders’ equity
$73,000
How many shares of stock are issued? A. 9,000 sharesB. 9,900 sharesC. 10,000 sharesD. 10,100 shares
32. Porter Hardware, Inc. issues $2 par common stock. Which of the following is true? A. $2 per share is presented on the balance sheet in the common stock account.B. $2 per share is the maximum selling price for these shares of stock.C. Liabilities will increase as a result of this transaction.D. $2 in dividends will be paid to the stockholders as a result of this transaction.
33. Petry Corporation issues 20,000 shares of $.50 par common stock for $6 per share. The account for Additional Paid-In Capital in excess of par will increase by: A. $130,000.B. $120,000.C. $110,000.D. $10,000.
34. Brumfield, Inc. issued 7,000 shares of $1 par common stock for $20 per share. In addition to the increase in cash, what effect does this transaction have on Brumfield’s accounting equation? A. Common stock increases $7,000 and retained earnings increases $133,000.B. Common stock increases $7,000 and additional paid-in capital in excess of par increases $133,000.C. Common stock increases $140,000.D. Retained earnings increases $7,000 and additional paid-in capital in excess of par increases $133,000.
