Question

1. Morris Corporation began operations on January 1, 2021. The firm was authorized to issue 600,000...

1. Morris Corporation began operations on January 1, 2021. The firm was authorized to issue 600,000 shares of $1 par common stock. During 2021, Morris had the following transactions relating to shareholders’ equity: January 1, issued 8,000 shares of common stock at $9 per share July 9, issued 18,000 shares of common stock at $10 per share Net income for the year was $110,000. Dividends paid was $30,000. Treasury shares purchased: 6,000 shares at $11 each (these shares were part of the July 9 issue) What is the total of shareholders’ equity at the end of 2021?

A. 4296,000. B. $266,000. C. $332,000. D. $362,000.

2. Carson City Enterprises had the following items in their stockholders’ equity on December 31, 2021: Deficit (debit balance in retained earnings) $ 1,500 Common stock 1,000 Paid-in capital—share repurchase 500 Treasury stock (at cost) 200 Paid-in capital—excess of par 15,000 During 2022 net income was $4,500; 25% of the treasury stock was resold for $225; cash dividends declared were $300; cash dividends paid were $250. What was shareholders' equity as of December 31, 2021?

A. $14,800. B. $15,200. C. $17,800. D. $19,225.

3. Accumulated other comprehensive income:

A. Is an asset.

B. Might include gains and losses on certain investments.

C. Includes accumulated net income.

D. Is reported between assets and liabilities.

4. Corporations are formed in accordance with:

A. The Model Business Corporation Act.

B. Federal statutes.

C. The law of individual states.

D. Federal trade commission regulations.

5. The preemptive right refers to the shareholder’s right to:

A. Maintain a proportional ownership interest in the corporation.

B. Vote for members of the board of directors.

C. Receive a share of dividends.

D. Share in profits proportionally with all other stockholders.

Business   Accounting   
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Homework Answers

Answer #1
Bank A/c 72000
Share Capital A/c 8000
Share Premium A/c 64000
Bank A/c 180000
To Share capital A/c 18000
To share premium A/c 162000
Share Premium A/c 66000
To Treasury share A/c 6000
To Bank A/c 60000
Share holders equity
Share capital 26000
Retained earnings 80000
Transfer from P&L 110000
Less Dividends -30000
Share Premium A/c 160000
Total Shareholder's Equity 266000

3. (B)

4.(A)

5.(D).

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