Question :
58.When no-par stock issued:
A. The entire amount received credited to the : 1259470
58.When no-par stock is issued:
A. The entire amount received is credited to the Additional Paid-in Capital account.
B. The issue price is credited to the Capital Stock account.
C. There is no legal capital created because there is no par or stated value.
D. The transaction usually involves only an exchange for non-cash assets or services, since the stock has no value on the stock exchanges.
59.Zigma Corporation is authorized to issue 2,000,000 shares of $4 par value capital stock. The corporation issued half the stock for cash at $8 per share, earned $336,000 during the first three months of operation, and declared a cash dividend of $60,000. The total paid-in capital of Zigma Corporation after three months of operation is:
A. $7,940,000.
B. $8,000,000.
C. $8,276,000.
D. $8,336,000.
60.Thurman Corporation issued 450,000 shares of $.50 par value capital stock at its date of incorporation for cash at a price of $4 per share. During the first year of operations, the company earned $100,000 and declared a dividend of $40,000. At the end of this first year of operations, the balance of the Common Stock account is:
A. $1,800,000.
B. $1,860,000.
C. $225,000.
D. $1,820,000.
61.Century Corporation issued 400,000 shares of $4 par value common stock at the time of its incorporation. The stock was issued for cash at a price of $16 per share. During the first year of operations, the company sustained a net loss of $100,000. The year-end balance sheet would show the balance of the Common Stock account to be:
A. $1,600,000.
B. $1,500,000.
C. $6,300,000.
D. $6,400,000.
62.Shore and Gardiner each own 10,000 shares of S&G Corporation $12 par value stock which they purchased for $38 per share directly from the corporation. If Shore sells his stock to Gardiner for $475,000:
A. Stockholders’ equity of S&G Corporation increases.
B. Assets of S&G Corporation increase.
C. Stockholders’ equity of S&G Corporation decreases.
D. No account of S&G Corporation is affected.
63.Refer to the information above. Assuming Juniper Corporation did not issue any more common stock in 2015, how does the increase in value of its outstanding stock affect Juniper?
A. Juniper should recognize additional net income for 2015 of $4 per share, or $240,000.
B. Paid-in capital at December 31, 2015, is $720,000 (i.e., 60,000 shares times $12 per share).
C. This increase in market value of outstanding stock is not recorded in the financial statements of Juniper Corporation.
D. Each shareholder must pay an additional $4 per share to Jupiter.
64.Refer to the information above. Assume Juniper Corporation decides to issue an additional 1,000 shares of its common stock on December 31, 2015. How will the above increase in value affect Jupiter?
A. Juniper can issue the 1,000 shares at a higher price than the initial 60,000 shares.
B. Juniper can sell the 1,000 shares for $12 each, as well as collect an additional $4 per share for each of the 60,000 shares sold initially.
C. Juniper reports a gain of $4 per share on all stock sold during the year.
D. Paid-in capital at the end of 2015 will be $732,000 (i.e., 61,000 shares times $12 per share).
65.Refer to the information above. Grant’s total legal capital at December 31, 2015, is:
A. $3,160,000.
B. $3,000,000.
C. $2,590,000.
D. $1,500,000.
66.Refer to the information above. The total amount of Grant’s paid-in capital at December 31, 2015, is:
A. $1,960,000.
B. $1,090,000.
C. $3,460,000.
D. $3,050,000.
67.Refer to the information above. The average issue price per share of Grant’s preferred stock was:
A. $112.
B. $100.
C. $110.
D. $66.
