Question

Which of the following is not a right possessed by common stockholders of a corporation? a.the...

Which of the following is not a right possessed by common stockholders of a corporation?

a.the right to share in assets upon liquidation

b.the right to receive a minimum amount of dividends

c.the right to vote in the election of the board of directors

d.the right to sell their stock to anyone they choose

---------------------------

The entry to record the issuance of 150 shares of $5 par common stock at par to an attorney in payment of legal fees for organizing the corporation includes a credit to

a.Cash

b.Organizational Expenses

c.Common Stock

d.Goodwill

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The Torre Company has the following stockholders' equity account balances in stockholders' equity on December 31.

Common Stock, $5 par (60,000 shares issued) $300,000
Paid-In Capital in Excess of Par—Common Stock 600,000
Preferred Stock, $100 par (5,000 shares issued) 500,000
Paid-In Capital in Excess of Par—Preferred Stock 100,000
Retained Earnings 200,000
Treasury Stock (cost, $12 per share) 60,000

a. How many shares of treasury stock are owned?
shares

b. What was the average market price per share at which common stock was issued? If required, round your answer to two decimal places.
$ per share

c. What was the average market price per share at which preferred stock was issued? If required, round your answer to two decimal places.
$ per share

d. What is the total value of the paid-in capital portion of stockholders' equity?
$

e. What is the total value of stockholders' equity?
$

f. How many shares of common stock are outstanding?
shares

g. If net income for the year was $75,000 and a preferred stock dividend of $20,000 was paid, what was the beginning value of retained earnings? How much is earnings per share for the year? If required, round your answer to two decimal places.

Beginning value of retained earnings $
Earnings per share $

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A bond is simply a form of an interest-bearing note.

True

False

-------------------------------

The face value of a term bond is payable at a single specific date in the future.

True

False

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Homework Answers

Answer #1

1.
Answer is b.the right to receive a minimum amount of dividends

2.
Answer is c. Common Stock
When stock is issued for legal fees, common stock will be credited

3.
a. Number of Treasury Shares = $60000/12 = 5000 shares

b. Average Issue price of common stock = ($300000+600000)/60000 = $15 per share

c. Average Market price of preferred stock = ($500000+100000)/5000 = $120 per share

d. Total Paid in Capital = $300000+600000+500000+100000 = $1500000

e. Total Stockholders Equity = $1500000+200000-60000 = $1640000

f. Shares of Common Stock outstanding = 60000 - 5000 = 55000 shares

g. Beginning Retained Earnings = $200000-75000+20000 = $145000

4.
Answer is True
Since like note, interest is paid on bond regularly and principal at maturity

5.
Answer is True

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