Question :
44.Which of the following terms designates the maximum number of : 1254262
44.Which of the following terms designates the maximum number of shares of stock that a corporation may issue?
A. Number of shares authorized
B. Number of shares issued
C. Par value
D. Number of shares outstanding
45.Which of the following statements best describes the term “par value?”
A. An amount used in determining a corporation’s legal capital.
B. The amount that must be paid to purchase a share of stock.
C. Determined by dividing total stockholder’s equity by the number of shares of stock.
D. The number of shares currently in the hands of stockholders.
46.Which of the following is not normally a preference given to the holders of preferred stock?
A. The right to vote before the common stockholders at the corporation’s annual meeting.
B. The right to receive a specified amount of dividends prior any being paid to common stockholders.
C. The right to receive preference over common stockholders as to the distribution of assets during a liquidation process.
D. All of these are preferences given to preferred stock.
47.The par value of a company’s stock
A. dictates the initial price of the stock.
B. has little connection to the market value of the stock.
C. is generally greater than market value.
D. may be revised each time a company issues more shares of stock.
48.Vargas Corp. issued 12,000 shares of no-par stock for $20 per share. Vargas was authorized to issue 35,000 shares. What effect will this event have on the company’s financial statements?
A. Increase assets by $700,000, increase equity by $700,000.
B. Increase cash flow from investing activities by $240,000.
C. Increase assets by $240,000, increase equity by $240,000.
D. Both B and C.
49.On January 2, 2013, Terra Corporation issued 20,000 shares of $20 par-value common stock for $22 per share. Which of the following statements is true?
A. The Paid-in Capital in Excess of Par Value account will increase by $40,000.
B. The Cash account will increase by $400,000.
C. Total equity will increase by $400,000.
D. The Common Stock account will increase by $440,000.
50.On January 12, 2013, Grove Park Corporation issued 550 shares of $12 par-value common stock for $15 per share. The number of shares authorized is 5,000, and the number of shares outstanding prior to this transaction is 1,200. Which of the following answers describes the effect of the January 12, 2013 transaction?
A. Option A
B. Option B
C. Option C
D. Option D
51.On February 2, 2013, the Metro Art Supply Corporation issued 9,000 shares of no-par stock for $17 per share. Within two hours of the issue, the stock’s price jumped on the UMSL stock exchange to $21 per share. Which of the following answers describes the effect of the February 2, 2013 transaction?
A. Option A
B. Option B
C. Option C
D. Option D
52.When the Common Stock account is disclosed on the balance sheet, it is reported at:
A. current market value
B. average issue price
C. lower of cost or market
D. par or stated value
53.Xi Company issued 20,000 shares of $10 par value common stock at a market price of $16. As a result of this accounting event, the amount of stockholders’ equity would
A. increase by $120,000.
B. be unaffected.
C. increase by $320,000.
D. increase by $200,000.
